By ROB SPAHR Press of A.C. Staff Writer | Saturday, March 20, 2010
With an industry analysis of New Jersey tourism trends
Deborah Seamon, of Quakertown, Pa., went into the office of Prudential Fox & Roach Realtors on Friday looking for her first summer vacation rental in Ocean City. Her grandmother owned a house in town, and the family had stayed there for many summers, but the home was recently sold. So now she’s looking for a place where eight people can stay for a week.
“Price is definitely playing a factor,” Seamon said.
Seamon’s arrival was a hopeful sign for shore Realtors. The shore summer rental market was hurt last year by the struggling economy and record-breaking rainfall that soaked the region. Last year’s poor season followed a 1.6 percent drop in tourism expenditures in 2008, according to an analysis of tourism trends done by IHS Global Insight, an economic consultant for the state.
But this year, shore real estate agents say early signs show the market is rebounding. Renters are still being more conservative with their vacation plans than they were before the economy declined, but agents in the region report an increase in bookings over last year.
“We’ve had the phones ringing off the hook when you get a nice day,” Prudential rental manager Mary Louise Bowdler said Friday. “We expect a busy weekend.”
Bowdler said last summer’s poor results haven’t led owners to lower rents, but most have not raised the rents for a few years.
John LaRosa, who has owned Down The Shore Realty in Ocean City for about five years, has noticed an upswing in rentals.
“The dropoff in 2009 was probably due to people’s apprehension because of the economy, and they chose to err on the side of caution,” LaRosa said. “But this year, they’re back because they’re probably tired of being pent-up and want to get back to the shore,” he said. “They have cabin fever, and they’re looking to rent.”
The rentals have economic effects. Diane Wieland, the director of tourism for Cape May County, estimated that the county’s rental industry brought in $1.6 billion dollars in 2008. Overnight lodging, in hotels and motels, brought in another $2.7 billion, she said.
The cost of summer rentals varies widely town by town and by the size of the rental unit. A review of units in area shore towns being advertised online showed that weeklong rentals could be found for as low as $500 in Wildwood Crest and $700 to $800 in Ventnor. A number of three-bedroom units were available in Ocean City in the range of $1,200 to $3,000 per week. And in Harvey Cedars, on Long Beach Island, rental properties were advertised for $2,500 to $5,000 per week.
Cape May County seasonal rentals account for half of the state’s seasonal rental income, according to economic consultants IHS Global Insight. And Wieland said when people stop renting, it hurts more than just landlords.
“It has a snowball effect, because there are fewer people out at the restaurants, at various attractions, at retail locations,” she said. “It also impacts our transportation industry, because they are not buying gas.”
Atlantic and Ocean counties also suffer when there is a drop in summer rentals. Those counties generated more than $292 million and $880 million in rental income, respectively, in 2008, according to the Global Insight report.
The numbers for just exactly how bad 2009 was will not be available until next month, Wieland said. But things are already better this year.
Nick Savopoulos fell in love with the New Jersey shore and wanted a getaway of his own here. The semiretired attorney, 64, of Port Washington, Pa., eventually bought a property in Margate, but had to rent it out when he wasn’t using it in order to afford it. Eventually, that one property became three.
But with the drop in summer rentals over the past couple of years, Savopoulos had to sell off one of his properties to pay bills. This year, however, interest in his rental properties has picked up.
“I think everybody had cabin fever through the winter. And now that it’s nice, they’re thinking ahead to summer,” Savopoulos said. “When it was really rainy last weekend, I think I got one call. But since it is supposed to be nice this weekend, I’ve been getting a lot of calls from people who want to come see the place.”
Patricia Shultis has been an agent for 11 years at Prudential Zack Shore Properties in Ship Bottom, where the summer tourist season is key to Long Beach Island’s economy.
“Usually the rentals always do very well here, but last year it dive-bombed for a lot of Realtors,” she said. “It was very slow.
“It’s been popping lately,” Shultis said. “People are definitely out and about, and looking forward to the summer.”
Officials from both the Southern Ocean County and Cape May chambers of commerce say the results they’ve seen so far are encouraging, but they’re still worried.
“The trend we’re seeing is that the off-season weeks during the shoulder (spring and fall) seasons are filling up faster than normal,” Shultis said.
The four busiest — and most expensive — weeks for summer rentals, Shultis said, are typically the last two weeks in July and the first two weeks in August.
“Those weeks are very light this year,” she said. “People still want to come to the shore, and they want to stay in certain houses. They just want to do it for cheaper.”
While many real estate agents reported a drop in summer rentals last year, Monica Eafrati — a sales associate with Weichert Realtors Brigantine Realty — said summer rentals in Brigantine have been on a steady rise for several years and 2009 was no different.
“It was almost like, for the longest time, people didn’t know we were here,” said Eafrati, who attributed Brigantine’s rise in popularity to its low costs and the construction of the Atlantic City-Brigantine Connector. “Now, we’re getting buyers coming here instead of the more expensive places (they went before).”
Eafrati said she’s seeing families save money this year by renting in larger groups.
“We’re seeing a lot of larger rentals going, and they’re being booked by groups … coming with three or four families at a time,” she said. “Many of them want a specific house or want to come during a specific time, but want to do it for cheaper.”