Thoughts on STR property "appreciation" in vacation markets?

[Jeremy H.]

What do you all think of the insane "appreciation" of STR type units in popular vacation areas...think anyplace with a beach, smoky mountains etc. Crazy to look at the prices from 5-6 months ago and see a 20%+ increase in the asking price. Places that were selling for 290-350K are now asking 450k+. I have several LTRs where I live and was looking to get into the STR market. But I see some crazy price "appreciation" along with interest rates that are several points higher than what we saw 6 months ago...and it has me wondering if it makes sense right now. I'm sure deals are still out there, but a year or two ago you could've bought any STR, just about, and cashflowed it nicely (I was starting in RE about a year and a half ago - have a duplex, fourplex and 2 SFHs). I believe it's still early in the market for STR rentals overall, and these prices may go up. But at the same time I'd hate to be caught holding the bag on an "overpriced" property. What are your thoughts on the STR market and these high prices? Do you see these prices coming down in the near term or just leveling and seeing a slower appreciation?

I wouldn't mind still getting a STR but with more LTR cashflow. Although I think the risk level with STRs is much higher financially.