Not including the 2008 financial crisis, does anybody have a sense if property values typically go down in vacation home markets in a typical real estate down cycles and/or recessions?

I would love to hear what is causing concern to you in this part of the cycle.

It's the normal ebb and flow of the investment cycle. 

I can certainly understand your dilemma here especially since you're 2/3 of the way from owning this unit free & clear.Market cycles, like the current one we are in, only come around about once per decade and this is the longest lasting seller's market we've seen in our lifetimes.

Don't stay in a cycle of learning.

And you must consider the market cycle and timing (e.g. now is a terrible time to try this)   However, this is one reason why you see some folks buying investment properties that do not make sense using a 1% rule.  

First, if you want to be relatively passive the entire time, I would suggest investing in value add multifamily or commercial syndications that have a 3-8 year hold cycle.

In this twenty year time horizon you'll go through at least three cycles of a lot of those.

To change a neighborhood you either have to change the way the population behaves, or it cycles out - gentrification usually.When you look a little closer you will see that prices and rents are definitley not the same!

It’s a bit of a vicious cycle bc tons of LTR investors searching for yield have pivoted to STRs and are happy to take ~10% COC returns since that beats what they can find today with LTRs … problem is STRs are much riskier/ more volatile, so in theory investors should demand a higher yield than this to hold these assets (but most folks aren’t thinking in this much depth).