Vacancies Increase in Some Vacation Rentals
July 10, 2006. A Wall Street Journal article titled, “Latest sign in summer-home markets: Vacancy� indicates that in some summer-rental spots around the country, a number of houses sit vacant and owners may be ready to make a deal.
The article by Christina S.N. Lewis, which is reprinted in AzCentral.com gives several examples where this is the case. She reports that prices have dropped by as much as 25 percent in Cape Cod, Mass. and that in New Jersey's oceanside-resort towns, rental volume has fallen about 15 percent since 2003. It’s a renter's market in the Outer Banks, N.C., a family-oriented destination
In some areas, oversupply seems to be the problem. For example, in Aspen, Colo., Five Star Destinations added 30 properties this summer, for a total of 100. Occupancy is about 80 percent this year compared with full last year. Michael Sarka, executive director of the Vacation Rental Managers Association Nationwide, is quoted as saying that rental inventory is up 12 percent nationwide, this year, mostly due to new second-home construction. The Travel Industry Association of America, of Washington, D.C., expects leisure travel to increase by less than 1 percent this year.
The article also points out that this downturn in rentals of vacation homes is not the case in other areas. Realtors in the Hamptons, New York report that the desirable water front properties have already been booked. Two other areas where rentals are very strong are Berrien County Michigan and Orange County California, where vacation rental owners have raised rental rates 5 percent this year while occupancy rates are up 8 percent.
This has been our own experience in our North Carolina mountain cabin vacation rentals. This spring and summer have been the strongest market we have ever experienced. That has also been reflected in reports we get from some other areas of the country. Also, we believe that conditions vary widely within every market. Those vacation rental owners who build their brand by astute marketing and by supplying superior services, amenities, and value will do well even when their competitors do not. We practice these features in our own vacation rental property, which is almost fully booked except for a few vacancies in the last week of August. Also, we explain these principles regularly in our Vacation Rentals Newsletter, which is available to members only.
