Rental Market Slows
By MANDY LOCKE
The Vineyard's summer rental market is soft this season.
How low the market has slumped, reasons for the dip and long-term projections have yet to be determined, but real estate agents across the Island feel the hit.
Some companies slowed slightly this season while others experienced as much as a 20 per cent fall. Real estate brokers feel the pinch in a variety of ways dollars, volume of inquiries, length of vacation stays but all are reporting a downward turn.
Many of the agencies see a correlation between a jump in rental prices and the slowdown.
"This is the first time in four years that our summer rental market hasn't grown," said Alan Schweikert, broker owner of Ocean Park Realty in Oak Bluffs.
An obvious problem is the leap in rental prices over the last few years.
"The jump from $1,500 a week to $2,000 is significant. Vacationers are looking at other places that might be more affordable," said Frank Markwica, sales and rental agent at Linda Bassett Real Estate in Edgartown.
The boom of the last few years, along with the perception that every visitor on the Island has limitless funds, enticed home owners to increase their prices.
"People have expectations that everyone that comes here is a Hollywood star or a dot-commer," said Patty Kendall of Kendall and Kendall Real Estate of Vineyard Haven.
Rising rental prices also shifted people from the rental market into the owners' market.
"Rental units climbed dramatically. It caused tenants to step into ownership," said Tom Wallace of Wallace and Company Inc., whose firm specializes mainly in sales.
The good fortune of homeowners in the last few years lured many into the rental market for the first time, causing a flood of inventory, said Rebecca Conroy Norris of Conroy and Co. Real Estate of Chilmark. The supply is now outstripping the demand, she said. This is particularly true in lower-end rentals, ranging from $1,500 to $3,000 a week.
Some blame the difficulty of securing a ferry reservation for vacationers' avoidance of the Island this season.
"They are told there are no reservations for a given day," said Ann Floyd of Sandcastle Realty in Edgartown. Mr. Schweikert agreed that many clients complain to agents about the ferry challenges.
Other brokers blame the growing tendency of visitors to look for rentals at the last minute.
"People are doing a lot of last-minute booking, which may be causing the skew in numbers," said Sharon Purdy of Sandpiper Realty in Edgartown.
"People are less able to plan ahead these days," said Ms. Kendall.
More generally speaking, Mr. Markwica partially blames the downturn in the economy, particularly the stock market fall, for the slowdown in the Island economy.
"The stock market dip made everyone think. People are not so free with their cash this season," said Deborah Hancock of up-Island's Hancock Real Estate.
"If the economy demands people look for better deals, then they will," said Mrs. Purdy.
Meanwhile, travel deals all over the globe this season are luring Vineyard vacationers to other spots.
"You can get a villa in Europe for much less than a house here for a week," said Lisa Thorn Smith, travel agent at Dukes Travel Services.
Now faced with a large number of vacant weeks this season, renters have been more inclined to make adjustments.
"Owners are slightly revising," said Mrs. Purdy, who welcomes the change.
It is yet to be determined whether the last-minute alterations will affect the cloudy rental forecast for the rest of the season.
While the economy pinches the wallets of Americans all over the country, rental brokers must ask themselves if the Vineyard runs any unique danger of pricing itself out of the market.
Ms. Floyd said that while she doesn't feel the Island has reached that point yet, it's "pushing the envelope."
"It's normal for people to be greedy. They think people don't think about this. They think everyone has money. It's not true. People are being cautious," said Ms. Kendall.
Mr. Markwica associates the surge in prices with President Bill Clinton's visits to the Island.
"They thought all visitors were Hollywood types," he said.
Overpricing caused a shift in control, Ms. Hancock said.
"When the market takes a dip, it changes from a sellers' market to a buyers' market. The owners are not in the driver's seat anymore," she said.
Some think overpricing is evident but not a problem across the board. "In some ways, we've priced ourselves out of the market, but people are still going to pay for the right property," Mr. Schweikert said.
Ms. Norris agreed that some homes are overpriced, but does not see an overwhelming cause for concern. "I don't think we've priced ourselves out of the market. It's still so desirable to be here," she said.
While it's hard to pinpoint exactly what price brackets take the largest hit this summer, it's fairly easy to see what type of vacationer is being affected.
"It's the families in the 30 to 50 range who make a good living. It's too difficult for them to get here and pay the prices," Mr. Schweikert said.
Higher-end clients haven't felt the hit, said Ms. Kendall, whose company has not felt the slump as much because of her wealthy clientele.
"It's not affecting the people who had wealth before the dot-com era. We're not seeing the people who made money overnight and spent it the next day," she said.
"It doesn't affect the rich. It never does," Mr. Schweikert agreed.
Whether this fall and its aftershocks are cause for concern or relief is also disputed. Many feel that by hitting the ceiling, the Island rental market will readjust and stabilize.
"I feel that it's a good change. It had to change. We got a little inflated, and we needed to correct," said Mrs. Purdy."I find it reassuring," said Mr. Wallace. "We can't continue to grow and rise in prices and be a small, beautiful and enticing community. The idea that there is some limit to what people will spend to vacation is reassuring. I'd be more fearful if we were at 100 per cent occupancy all the time."