By MADDY VITALE
After three straight years of rising prices for vacation rentals that began at the height of the COVID-19 pandemic, the market is beginning to stabilize.
What that translated to for Ocean City property owners was that not all renters were willing to pay higher rental costs, resulting in some properties not being rented out during certain weeks.
Overall, local realtors called it a good season, but a more normal one than the inflated pandemic-priced days.
They also said that in some situations, property owners should evaluate their pricing to be more in line with what the renters of 2023, and the upcoming 2024 season, will pay to stay in “America’s Greatest Family Resort.”
Pete Madden, broker/owner of Goldcoast Sotheby’s International Realty in Ocean City, said while the summer season ended up strong, there were some spotty weeks where not all of the rentals were sold out, which was the opposite during the 2021 and 2022 seasons.
That, Madden said, could be an indication that property owners are asking too much for their rentals and should consider “adjusting their pricing.”
“As usual, the end of July and beginning of August were great. What we are finding, though, is year over year, for the past eight to 10 years, owners have been increasing their rates,” Madden said.
Some of the higher rental costs go with the increased costs of living. There are also the factors such as the pandemic years when restrictions on travel kept vacationers closer to home.
Madden, who is also president of the Ocean City Council, said this, “We have to maintain a finger on the pulse and adjust accordingly.”
Madden and other realtors agreed that the average three or four-bedroom home in Ocean City rents for anywhere from $3,000 to $4,500 a week.
Pre-COVID prices for the same typical home rental were closer to $2,500 to $3,000 per week. High-end properties can rent for thousands a week, with some on the Boardwalk, for example, commanding $20,000 for a weeklong stay.
Over the past two years, especially, Madden said there were more second home buyers at the shore and of those second homeowners, more were staying in their vacation homes instead of renting them out.
It is all about supply and demand.
“We were used to the past two years of both a rental boon as well as a sales boon,” Madden said. “There are more rentals on the market and with the supply, the pricing needs to be adjusted.”
Duane Watlington, founder of Vacation Rentals Jersey Shore LLC, who has rental sites in Ocean City, Long Beach Island and the Wildwoods, gave his thoughts on the summer season.
“I would summarize the 2023 season as a return to normal. What that means is the audience, the entire Jersey Shore, is much smaller than over the past three years,” Watlington said. “It is the size before COVID. There are still a lot of people who want to vacation at the shore, but there is a lot less demand.”
That is because with the travel restrictions lifted after the height of the COVID-19 pandemic, vacationers’ options greatly opened up.
“People are traveling abroad. They are going to Europe. They are going to Disney World. They are going on cruises. You lost a big part of the audience, which hurt,” Watlington explained of vacationers who normally head to the shore.
Nevertheless, he noted that this summer his three rental sites gained 500 new listings across the three markets, Ocean City, Long Beach Island and Wildwood. The website for Ocean City’s rental listings is vrocnj.com.
What he noticed over the 2023 season is that people are booking vacations later. Instead of booking a vacation by January, some vacationers waited until June.
“What we see is the traffic picks up after Memorial Day,” he said. “Traffic was off the charts by Father’s Day. Most of the properties were rented.”
Like the local realtors, Watlington works with the property owners.
“If a property is at market price, they will fill their property by the first week of April,” he said. “If they were booked in January of this year, then they were probably under market, and if summer weeks are available after Memorial Day, then they should be lowering their prices.”
Kevin Redmond, managing broker at Long & Foster Real Estate in Ocean city, also called the 2023 season “normal.”
“During COVID, we experienced a high volume of rentals and now that we are post-COVID, it was kind of a more normal rental season,” Redmond said. “We weren’t sold out, but we were still very busy and full. We came out of seasons during COVID where everything was selling out and nothing was available and now we have a more normal summer.”
Redmond pointed out, however, that there are good reasons why the rents are up in some cases.
“When you sell out for three straight years and all the other expenses go up, it is the time to raise the rates,” he said. “Along with the rest of the economy, people saw a difference in pricing, but I don’t think it was something egregious.”
He added that to those who say a family could take a big trip that requires a hop on a plane for the same price as a car ride to Ocean City for a week, it simply isn’t so.
“I’ve been hearing for 20 years, ‘I can take my family to Mexico for that amount.’ The reality is you can’t. You can put 10 people in a large house that rents for $4,000 in Ocean City,” Redmond said.
Like Redmond, Chris Monihan, of Monihan Realty in Ocean City, said it was a “really good year overall.”
“We did a lot of rentals. We did fewer rentals than last year, but last year was more than other years in our history,” Monihan explained. “There were some non-peak weeks where some properties did have some unrented weeks, but I would say the numbers overall were normal and still very busy.”
Monihan said rental rates model home values.
“As home values have gone up significantly, rental rates have gone up,” he said. “We are telling people to keep rates the same. We are booking for 2024 rentals already and we have written a lot more leases for 2024 than we wrote for 2023.”
When it comes to success in the rental market, the longtime realtor in his family’s business said that it’s about communication.
“Owners can call us up and speak to us about the rates. We suggest the rental rates. We want to work with them and get each week rented. They look to us and it is our job to give them the best advice,” Monihan said.
