By Michelle Higgins
RISMEDIA, July 2, 2007–(NYTimes.com)–Each year, Stephen Duffy and a bunch of his friends rent a house in Provincetown, Mass., where they compete in a Labor Day tennis tournament. Finding a rental to accommodate the group in this popular beach town at the tip of Cape Cod usually involves many calls to brokers, vetting of multiple properties, and often simply settling for whatever is available.
Last year, “we ended up in this shoebox,” said Duffy, a sales consultant for an insurance firm in Boston. The result was five sweaty people clamoring for showers between tennis matches, he said. “It was a nightmare.”
But this year locating a rental was much easier. On short notice, Duffy was able to find a brand-new three-bedroom condominium with two decks, just a short walk from the beach. Kinlin Grover GMAC Real Estate had listed it at between $2,250 and $2,500 a week, but Duffy was able to negotiate the rent down to $1,800. “I was shocked,” he said. “It worked out so perfectly.”
It’s not just Cape Cod. From the rolling hills of Litchfield County in Connecticut to the white-sand beaches of the Gulf Coast, real estate agents say it’s a renter’s market this summer in many prime vacation spots.
Thanks to greater inventory and later booking trends, popular resort areas like Long Beach Island, N.J., the Outer Banks of North Carolina and Myrtle Beach, S.C., still have availability. Even in exclusive enclaves like the Hamptons, late-summer rentals are still trickling onto the market.
“Availability is out there in key destinations where historically it hasn’t been,” said Justin Halloran, a vice president at HomeAway.com, which specializes in vacation rentals by owners. He cited such destinations as Cape Cod and Martha’s Vineyard, Traverse City and Petoskey, Mich., and Hawaii, better known as the Big Island, and Maui. As of mid-June, nearly 20% of United States vacation rentals listed on the site had yet to be booked for the Fourth of July holiday, while Labor Day was still wide open with more than 70% of rental properties showing availability.
As a result, vacationers looking for rental homes are quickly learning that this summer ? even more so than in previous years it’s paying off to procrastinate. Some landlords, anxious to fill their properties with paying renters, are sharply dropping rents to spur demand. A quick online search for cut rates in Cape Cod turned up as many as 60 rentals with special deals and offers at HomeAway.com, including 15% off a three-bedroom condo on the waterfront in Provincetown for July 21 through July 28, and a four-bedroom ranch in Falmouth, reduced to $1,295 from $1,675 for the first week in July.
Even in places like the Hamptons and Martha’s Vineyard, where availability tends to be tighter, there were deals to be had, including a three-bedroom house in East Hampton with a heated pool a few blocks from the beach for $3,800 a week in August, marked down from $4,200 a week, and a new three-bedroom house on a quiet cul-de-sac in Vineyard Haven offering 20% off from July 14 through Aug. 4.
Real estate experts say the abundance of rental inventory is linked to a general weakening of the market for second homes. Since rising interest rates and other factors have limited the number of new buyers, houses that otherwise might be sold are instead offered for rent. In addition, during the real estate boom, when house values were rising sharply, many second-home owners were content to keep their vacation getaways to themselves.
“Now, people are realizing that appreciation isn’t sustainable,” said Brian Sharples, chief executive of HomeAway. As a result, he said, they are looking for ways to generate some income on the property and recoup some of their costs. “It’s one of the things that is keeping our growth engine going,” he added.
John and Betty Hunter from Houston, Ala., got caught up in the preconstruction sales boom in late 2006 and purchased a two-bedroom, ocean-view condominium in Gulf Shores, Ala. for $650,000.
“To help with expenses, we decided to rent it out,” said Hunter, who listed the property online for $1,750 a week in July. To spur interest, she said, she had discounted the rent by as much as 20% in May and June. Now, she said, “I’m booked until November.”
Some landlords have not been so lucky. Sunny MacMillan, a retired psychologist from Lakeville, Conn., in Litchfield County, who has been renting out her home for the summer for many years, is worried it is going to sit empty this year.
“I’ve never run into this kind of problem before,” said MacMillan, who previously had little difficulty renting out the three-bedroom home, set on 10 acres with two waterfalls and a trout stream, for $20,000 for the summer season. Now, she said, she’d be happy if she could get $8,000 for a month.
All of this is good news for procrastinators who haven’t yet booked their summer retreats.
?If someone was to walk in the door today, whether they wanted Lavallette, Bay Head, or L.B.I, I could find them something for the summer,? said Pam Maguire, office sales and rentals manager at Diane Turton, Realtors, referring to Long Beach Island and other popular New Jersey shore locations. Even the week of the Fourth of July is still available, she said.
A survey of members of the Vacation Rental Managers Association found that their inventory of United States homes was up by 12% this year, said Michael Sarka, the association’s executive director. And new rental listings are up about 20% from last year at Rentalo.com, an online search engine that connects travelers directly to property owners and managers.
The uptick in inventory means renters have more room for negotiation. Horacio Artiga, 31, a professional dog walker from Washington, was able to reduce the price of a two-week June rental of a four-bedroom house with an eight-person hot tub in the Outer Banks by $600 just by asking for a better deal. One tip: Factor in rental fees and taxes before making an offer and you are much more likely to stay within your rental budget, Mr. Artiga said.
Another advantage for renters this season is that where old-fashioned cottages used to be the norm, there are more new properties available.
“There’s a lot of homes available for rent that were built for sale and have not sold,” said Lawrence Porter, an owner and broker in the Westhampton Beach office of Brown Harris Stevens. “You may be able to get a brand new house with very nice rental furniture for not an exorbitant amount.”
For example, he said, a brand new five-bedroom home with a heated pool in Westhampton listed for sale for $1.9 million is also up for rent for July and August for $65,000.
Those looking for something cheaper can try Cape Cod.
“What’s happened here is our taxes and property insurance have gone up,” said Bett McCarthy, regional vice president, at Kinlin Grover GMAC Real Estate, which has 15 offices all over the Cape. “Some people are feeling the pinch and, especially if they have an adjustable-rate mortgage, they need to make their expenses.”
As a result more people are renting this year and while landlords aren?t advertising reduced rates yet, negotiating is an option.
In the Myrtle Beach market, extra capacity has made the resort area “a vacationer’s bargain as of late,” said Brad Dean, chief executive of the Myrtle Beach Area Convention and Visitors Bureau. In the last five years, the region, which encompasses 12 communities, from Little River to Pawleys Island, has added nearly 20,000 new rooms, mostly in condo-hotels that combine the amenities of a traditional condominium with standard hotel services.
“Today more than ever before, you will see those businesses offering value-added packages, even in the summer,” Mr. Dean said.? “Ten years ago, most of those vacation rental agencies would sell out nearly all of their inventory from Memorial Day to Labor Day, but those days are gone.”
Real estate agents echo that point.”There are more vacancies during the week of the Forth of July than ever in the Myrtle Beach area this year,” said E.J. Servant III, owner and broker in charge of Surfside Realty Company in Surfside Beach, S.C. “We are seeing discounts being offered across the board.”
Just last week Truddie Jones took advantage of a 20% discount the company was advertising to plan a Fourth of July vacation with her family. The 11 of them will spend a week in a two-story condo just a few feet from the beach for about $1,580.
“The fact that I got a discount was very surprising,” said Jones, a staff sergeant in the Army from Hinesville, Ga. “The fact that it?s a holiday and I got the space I needed so close to the beach, I couldn’t beat that.”
Source: http://www.nytimes.com/2007/06/29/travel/escapes/29rental.html?ref=realestate
