After struggling through a disappointing summer season last year, Cape Cod real estate agents are seeing some positive signs that this year’s vacation rental market seems to be headed for sunnier days.
The economic slump, war in Iraq and the harsh snowy winter followed by a cold and damp spring all combined to hurt vacation rentals on the Cape last year. Real estate agencies reported that reservations for some rental properties were off by as much as 25 percent to 30 percent in 2003.
“This year, we’re seeing a lot of the properties going,” said Jamie Regan, owner of Century 21 Regan Realtors in Mashpee. “Our numbers are on track with 2002,” said Regan, speaking specifically about his company.
Some rental agents are hoping to get a boost from the Democratic National Convention in July, which will flood the Boston area with thousands of out-of-state visitors during a prime vacation month.
In communities like Provincetown, a popular vacation spot for gays, real estate agencies are also anticipating more business from gay and lesbian honeymooners seeking marriage licenses in Massachusetts next month. However, agents interviewed by Banker & Tradesman last week said so far they haven’t experienced a tremendous spike in business from either conventioneers or same-sex couples wanting to tie the knot in the Bay State.
But with temperatures nearing 80 degrees last week, many people’s thoughts were turning to summer. Real estate agent Diane Ablitt said she started getting inquiries from vacationers interested in spending summer days on the Cape as soon as the weather started heating up.
“Up until two weeks ago Â… the phones weren’t ringing as they should be,” said Ablitt, rental manager for Cotton Real Estate in Osterville. “We’ve had a slow start because of the cold winter. The minute the weather broke, the phones definitely started ringing.”
Ablitt, whose company handles about 100 rentals in the mid-Cape area, has already secured a $90,000 two-month lease for a home in Osterville. She has also rented another home in Osterville for three weeks for $30,000 and a beachfront home in Harwichport for $50,000 for one month.
Still, in the last couple of weeks, Ablitt has noticed that vacationers are starting to make offers on properties instead of settling for the stated rental fee. Ablitt recently encountered one renter who offered only $2,500 to rent a home in Cotuit that was listed at $3,500 for a week. The homeowner countered with a $3,000 rental offer, but the vacationer refused to budge.
“We’re seeing a lot of that,” said Ablitt, noting that in prior years renters on the mid-Cape didn’t really negotiate. Rents for properties listed at Cotton Real Estate range from $1,200 to as much as $12,500 for a week.
Last week Ablitt talked to one property owner who has had his home listed for six weeks and wanted to reduce the rent if the property isn’t booked by April 28. But Ablitt, who said she’s optimistic about this year’s market, thinks the rent is appropriate.
“Owners are used to being pretty much booked by this time so they’re panicking and Â… they’re talking about reducing rents,” said Ablitt.
Sunny Outlook
In addition to suffering from a sluggish economy, rentals on the Cape have also been hurt in recent years because some longtime vacationers – encouraged by low mortgage interest rates – have decided to purchase second homes in the region, according to local agents.
“It [home purchases] definitely has” affected vacation rentals, agreed Ablitt.
Some also believe that last year’s oil spill on Buzzards Bay may have deterred visitors from vacationing on the Cape. Trying to make up for the dismal summer last year, Cape Cod agents tried to draw more visitors by promoting deeper rent discounts during the fall shoulder season.
“Last year, we had so many strikes against us,” said Ablitt. This summer, Ablitt believes rental properties will fare better, although agents may have to work a little harder to piece deals together.
Regan said rentals are up by about 30 percent at his firm compared to last year, which brings the numbers to the same level as 2002. One factor that may help this year, according to Regan, is that Labor Day falls later in the year, which will extend the summer season.
While the market appears to be on the mend, there are still vacation properties available in the prime months of July and August, said Regan.
To fill vacancies, Regan’s company is trying to target participants of the Democratic National Convention who may be interested in visiting the Cape before or after the event, which will be held in Boston in July. Regan is advertising his company’s services on the official convention Web site, which features a link to his agency’s online rental site.
“It’s [Cape Cod] Kennedy country, and we thought we might get some die-hard Democrats that have never been out here and have never seen the Cape,” said Regan.
“I think some people have called and are thinking about it,” said Regan.
In Provincetown, Len Bowen, one of the owners of Harborside Realty, said his agency has rented to at least one Democratic conventioneer.
Like other business owners in town, Bowen said he was expecting to get more business from same-sex couples honeymooning in Provincetown – especially since the town clerk’s office has answered hundreds of phone calls from out-of-state gay couples interested in getting marriage licenses. But that hasn’t happened yet.
Despite that, Brown said that weekly rentals at his agency are much stronger than last year. In contrast, longer-term seasonal rentals – which are mostly occupied by people coming to town to work for the summer – are slower.
“I don’t know if it’s [the slowdown in seasonal rentals] because people who would normally rent have purchased homes or if it’s because of the economy,” said Bowen, whose company handles about 200 rentals.
“My intuitive sense, though, is that rentals are going to be better” this year, he said.
Interest in vacation rentals has been pretty steady at Duarte/Downey Real Estate in Truro, which markets between 250 and 300 rentals on the lower Cape.
Steve Downey, the real estate company’s owner, said about 75 percent of the firm’s business is a result of word-of-mouth. Downey said he hasn’t done any special marketing to draw people who are going to be attending the Democratic National Convention in Boston this summer. But he said in the last three years he has “had to do a lot more advertising just to generate calls.”
There have been some signals, however, that this year’s season could be better. “We’re actually a little ahead of last year at this particular time,” said Downey.
