A six-building compound on Martha’s Vineyard is largely booked for the summer season at $125,000-per-week rates, a reflection of the sturdy demand for high-end vacation rentals. Photo courtesy of Wallace & Co. Sotheby’s International Realty

If you act quickly, there’s still a two-week window left in July to rent a $125,000-per-week vacation compound on Vineyard Sound on Martha’s Vineyard, complete with 9 bedrooms, tennis courts, private beach, a pool and other posh amenities.

But if you want to rent this sprawling 20-acre, six-building compound known as “Chip Chop” during the other prime weeks of summer, you’re out of luck. They’re all booked up. Sorry.

And you’ll be out of luck finding other luxury vacation getaways for slightly less money on the Cape and Islands this summer – in the $40,000 to $50,000 per week range, for instance – because they too are mostly booked for the summer.

Yes, luxury rentals are doing just fine this year on Cape Cod, Martha’s Vineyard and Nantucket.

Maybe luxury rental prices aren’t spiking at double-digit percentage rates each year, as they were during the frenzied COVID era. And maybe the wealthy are renting luxury homes today for shorter periods of time compared to a few years ago.

But there’s still exceptionally strong demand for luxury vacation homes on the Cape and Islands – with rental prices continuing to rise, albeit in the low single-digit percentage range.

“No doubt, the luxury market has cooled a bit in terms of prices, but not the demand,” said Jim Reese, chief operating officer at WeNeedaVacation, the online vacation rental portal. “The market has settled into a more normal mode. But it’s still very strong.”

Samantha Morel, the rental manager at Wallace & Co. Sotheby’s International Realty on Martha’s Vineyard, agrees.

“While the rental market has normalized from the unprecedented demand seen during the pandemic years, pricing within the luxury segment has remained remarkably strong,” she said. “The upper end of the market remains particularly robust.”

Rental Rates Rise 3.5 Percent

Of course, what constitutes “luxury” all depends on the location and size of homes, the number of bedrooms, interior furnishings and the various amenities, from pools to on-site guest houses.

The Cape Cod & Islands Association of Realtors loosely defines luxury rentals as those homes starting at $10,000 to $12,000 a week and up.

Right now, those luxury homes are seeing rental rates increase of about 3.5 percent while summer occupancy levels hold steady at about 90 percent, said Betsy Hanson, chief executive of the Cape Cod & Islands Association of Realtors.

The same can’t be said for the Cape’s non-luxury rental market priced at $5,000 a week or less. Non-luxury rental prices are holding steady this year, but occupancy is down 10 to 15 percent, according to the association.

Among the reasons for the occupancy plunge in non-luxury rentals: high gas prices squeezing the budgets of many American households and a drop in Canadian and international visitors to the Cape.

“The non-luxury market is not as strong as the luxury market,” Hanson said. “Getting to the Cape, whether by car or plane, can get expensive for many people.”

Michelle Sylvia, an agent at Berkshire Hathaway HomeServices-Robert Paul Properties in Osterville, agreed that non-luxury units are “taking a hit” this summer due to inflationary pressures in general.

The combined 14.5 percent local and state tax rate on Cape Cod summer rentals isn’t helping matters, she said.

But that’s not hurting the wealthy.

Real estate agents say vacation rentals in the $15,000 per week category are the sweet spot on the Cape this summer. Photo courtesy of WeNeedaVacation.com

“Higher-end rentals are doing much better on the Cape,” Sylvia said.

Sylvia noted she rented out a waterfront home in Chatham for $45,000 a week – and that was before the home was even listed this past January, she said.

Not all luxury homes are going in the $45,000-and-above range.

The sweet spot for a luxury rental home is actually about $15,000 per week on the Cape, usually for larger homes with waterfront, or close to waterfront, locations. Pools are considered a must amenity for many high-end renters, she said.

The lower Cape – including Chatham, Harwich Port, Osterville, Orleans, Provincetown and other nearby towns – tends to have the most luxury homes on the Cape, real estate sources said.

Nantucket Rentals Rise 4 Percent

When it comes to the uber-tony Nantucket, it’s pretty safe to say that most of its rental market falls into the luxury category – with five-figure weekly prices the norm.

But even Nantucket has seen a slight rental-market slowdown in recent years – with the emphasis on “slight.”

“The era of rapid price appreciation is over,” said Steve Maury, owner of real estate firm Congdon and Colemen and founder of NantucketRentals.com. “But the prices are holding up. Nantucket remains a solid market.”

So far this summer, Maury said, daily rental prices on the island are averaging about $1,528 per night, up about 4 percent from last year, based on his firm’s internal numbers.

There was some fear last year that a proposed crackdown on short-term rentals on Nantucket might harm its rental market this summer.

But last November, Town Meeting voters overwhelmingly approved the legalization of short-term rentals on Nantucket, eliminating concerns about a falloff in summer rental this year and beyond.

“There’s been no great pullback or surge in rental activity,” Maury said. “Everything is roughly the same as last year.”

On Martha’s Vineyard, the luxury rental market is also alive and well.

“Over the past two seasons, our average weekly rental rate has increased by approximately 8 percent, demonstrating continued demand for exceptional properties in prime locations,” Wallace & Co.’s Morel said. “These bookings highlight the continued appetite for truly exceptional rental experiences on Martha’s Vineyard.”

And remember: There’s still time to book Martha Vineyard’s legendary Chip Chop property, previously owned by Broadway star Katharine Cornell and later by CBS News anchor Diane Sawyer, for a mere $125,000 a week. Availability is limited to early July.