Vacation rentals down

Everyone knows that homes for sale right now are staying on the market for longer than ever. Now, the same thing can be said for vacation rentals.

There is not only a surplus of un-bought residential units on the market, but also a lot of un-rented vacation units as well.

Although some markets are not being phased at all by the housing down turn, some markets are being severely affected.

An article by Christina S.N. Lewis of The Wall Street Journal, “Vacancy signs proliferate in summer-home rentals.

“ In summer-rental spots around the country, a number of houses sit vacant and owners may be ready to make a deal. Many agencies say they are offering discounts for the last two months of the season. Prices have dropped by as much as 25% in Cape Cod, Mass. In New Jersey's oceanside-resort towns, where rental volume has fallen about 15% since 2003, Childers Sotheby's International Realty is giving discounts of as much as 25% for some homes. In South Carolina, Hilton Head Rentals & Golf has cut 15% to 20% off its remaining one-to-two-bedroom listings.”

This is all a reflection of the housing “boom” and “bust.” Builders got a little crazy during the boom, and constructed too many homes than there was a demand for. Now, people are finding they have extra homes on their hands whether they are for full-time use or as a vacation property.

“ One factor: oversupply. In Aspen, Colo., Five Star Destinations added 30 properties this summer, for a total of 100. Occupancy is about 80%, from full last year. Nationwide, rental inventory is up 12% this year, mostly due to new second-home construction, says Michael Sarka, executive director of the Vacation Rental Managers Association, of Santa Cruz, Calif. The Travel Industry Association of America, of Washington, D.C., expects leisure travel to increase by less than 1% this year.”

Besides the obvious oversupply, many people are blaming the internet for many of the vacancies, because people can book travel at the very last second on the Web.

“Early bookings were strong in a few popular areas, but agencies say more travelers have waited to plan their trips, a dynamic some link to a rise in Internet sources that allow last-minute reservations. A few years ago, homes filled up early, says Renée Gardner in Union Pier, Mich., who manages 40 homes along Lake Michigan. ‘In February, we'd be hoarse from talking on the telephone. Now people are calling up today and wanting a week starting tomorrow,’ she says. In Lake Geneva, Wis., Keefe Resort Rentals is 35% vacant for July and August. It is waiving weekly minimums and allowing last-minute stays of two and three days. ‘This year, people weren't pre-booking,’ manager Theresa Larsen says.”

People who decide to procrastinate on staking out a rental in advance, could be out of luck in some places or they may have to sacrifice certain amenities.

“Of course, renters may have to be flexible on dates and amenities. The homes that haven't been rented are often older and have fewer features like pools. In Lake Geneva, large lakefront properties are scarce, but smaller homes inland are available. The most desirable waterfront estates in the Hamptons in New York began booking seven months ago, but some places on the ocean are open for August.”

“And procrastinators are out of luck in some spots. There's only one sandy beachside rental available at Coldwell Banker in Malibu, Calif., for August, compared with 50% occupancy last summer. Sand N' Sea Properties on West Galveston Island, Texas, is nearly completely booked, says owner Bert Feinman, thanks in part to a new water park in town. Last summer, the agency had a vacancy rate of 30%.”

Back to Articles