I wouldn't necessarily say that this shift is here to stay, but we definitely have to make some changes to our acquisition process to accommodate creative deals and novations.This shift is due to the saturation of the major markets, resulting in newcomers in the business offering too much for properties and not delivering on those promises, realtors promising too much for listings only to have them heavily decreased or canceled six months later, and the small increase in supply that we have experienced since the beginning of the year.But yes!

However, the STR market in our area has become saturated and most people aren't making money anymore doing arbitrage so they are exiting.

George has a HUGE saturation issue with STR.  

Some markets are too saturated and the price is already near the long term rent price so we just listed it for long term rent. 

The Packwood, WA market may be officially saturated on STR's.

Is it already pretty saturated?

Its a more saturated market now due to low barrier to entry and all of the "guru's" selling Arbitrage online to folks.

I also keep hearing that STR is rather saturated overall, whereas midterm is chronically undersupplied.

This is precisely what's fueling the saturation issue.You're not alone in this.

Most people just end up copying each other and that's when the "saturation" starts driving a race to the bottom on price.