For the past five years, Mary Alice Panarello of Wilmington has booked six weeks at the beach spanning the month of August, a premium period. The first three years were spent in a single-family cottage near the Rehoboth Avenue circle. But last year, she learned that the agency had booked the property to someone else for the entire summer. Left scrambling, she finally found a condo in a multi-unit building.
“I looked at perhaps 10 places, and some of them were God-awful,” she recalled. “Three years ago, there was more available, and people were willing to deal.”
For the coming season, she took no chances. She booked in December 2011.
Panarello isn’t the only one getting a jump on a beach house. “Rentals are up 18 percent over last year,” said Michelle Esposito, the rental manager of Prudential Gallo Realtors in Rehoboth Beach. “We went through a period where there was so much on the rental market that guests waited to book. Seems like they want to plan early now.”
Esposito’s colleague over in the Lewes office, Adriane Gallagher, said her rentals are up about 15 percent.
That increase in early rentals may be a sign demand is catching up to supply in Sussex County. Statistics recently released by the Delaware Tourism Office show that between 2000 and 2010, the number of seasonal homes in Sussex County increased nearly 40 percent to just under 35,000 properties. Those seasonal homes account for just over 28 percent of all housing units in Sussex County, with a rental value of nearly $870 million dollars, according the Tourism office.
The Early Bird and the Bargain Hunter
While the agencies have enjoyed an influx of early birds, they still expect to hear from people interested in renting after the season starts. “I would still expect that our bookings in the middle of summer will continue to grow,” Gallagher said. “The problem will be availability, especially if guests wait until the last minute.”
That’s particularly true for guests who have certain demands, such as Internet access, pet-friendly accommodations, beach proximity or air conditioning.
During the economic crisis, repeat customers still comprised the bulk of many agencies’ bookings. John F. Kleinstuber and Associates in Fenwick Island, which handles more than 100 properties, gives returning clients first crack at its rentals.
On Nov. 10, Kleinstuber opens reservations only to customers who wish to book the same property during the same week of the year. On Nov. 14, current customers interested in a different property or another week can start making reservations. Those who’ve never booked with the agency before can do so starting Nov. 15.
This fall the calls poured in. “We had a huge opening of reservations,” said John Kleinstuber, whose father founded the agency in 1977. “The first couple of weeks were fantastic, and we had a large amount of our properties booked solid after that first week.”
Gallagher is receiving calls from customers she hasn’t heard from in several years. “It leads me to believe that the average consumer is loosening their belt a bit and ready to indulge in some luxuries, one of which is a vacation.”
Sharon Palmer-Stauffer would agree. “I think people are sick and tired of skimping on vacations,” said Palmer-Stauffer, vice president and manager of rental operations at Coldwell Banker Resort Realty, which has locations in Lewes and Rehoboth Beach.
Beach rental agents are accustomed to guests from Delaware, Maryland, Virginia and Washington, D.C. But in recent years, guests from New York and New Jersey have joined the ranks. It seems vacations at the beach in Delaware can be more cost-effective than stays at the Jersey shore, where rental prices are often higher and sunbathers may have to pay for beach tags.
The boost in early bookings could make things more difficult for the last-minute guest who waits to reserve a property in the hope of negotiating a deal. During the recent economic downturn, waiting until the last minute often proved an effective strategy.
Michelle Kramer-Fitzgerald of Wilmington knows the process firsthand. For 13 years, she and her friends have rented a beach house together for a week. “We wait until the very last minute to book,” said Kramer-Fitzgerald. They widen their search to Dewey and Rehoboth to increase their options. By being patient, they’ve landed up to 20 percent off the rental fee.
But she noticed a change in 2011.“There were definitely less choices in terms of places available and less folks willing to negotiate on price,” she said. “We still got a nice place but didn’t have the selection we had in the past.”
Kleinstuber said there were fewer last-minute reservations in Fenwick in 2011 than in 2010. Perhaps that’s because narrow Fenwick Island, which is sandwiched between the bay and the ocean, has a tighter supply of available homes than Lewes and Rehoboth, where vacation properties have spread west of Route 1. According to Esposito in Rehoboth, last-minute bookings in Rehoboth were about the same in 2011 and 2010.
Prices start to rise as renters demand more
Those willing to rent inland, change their desired dates or make do without amenities have more choices. But today, most renters want some luxuries. Must-haves include air conditioning, wireless Internet and a washer and dryer, Esposito said. Kleinstuber adds a dishwasher to the list.
“The times of the old, musty beach house are gone,” Esposito noted. “Guests want flat-screen TVs, Internet, fully equipped kitchens to save money on eating out—and they want to bring their pets!”
A pool has become a hot commodity. “We have a large demand for private homes with pools, and there are not too many here in Fenwick,” Kleinstuber said. “The few we have book quickly and for big bucks.”
Before opting to use it themselves in summer, Kleinstuber and his family rented out their Fenwick cottage. (They have a primary home in Bethany Beach.) “We put a pool in, and the next summer our rental went up 50 percent,” he said.
Properties with all the bells and whistles do well, and many of them sold out in 2011. That’s prompted some to raise their rates. “So far, the increases haven’t been met with resistance,” Gallagher said. In Fenwick, Kleinstuber noticed that about 25 percent of his owners raised their rates.
In Rehoboth, a rate increase often reflects a property upgrade and an amenity addition, Esposito said. Even so, it’s normally limited to up to $50 a week.
As always, location plays a part. “The in-town and beach properties are always going to rent at a premium,” Gallagher said of Lewes.
The bookings so far this year are fostering some optimism among agencies—and it has opened the door to new possibilities for owners. Palmer-Stauffer now markets homes to planners for corporate retreats and destination wedding parties.
Rentals, she said, are no longer limited to summer. “I think there is a lot more opportunity in this area for expanding the shoulder season,” she said. “Even in the dead of winter, people need to unwind.”