Superstorm Sandy largely spared the Delaware coast, but when the skies cleared, many vacation homeowners in the First State still expected to clean up this summer – financially speaking, that is.
Since the storm ravaged coastal resorts like Seaside Heights, N.J. – which is still rebuilding ¬– these owners anticipated an influx of displaced vacationers new to the Delaware beaches. And they weren’t alone.
“We all thought we were going to see it,” said Julie Gritton, a rental agent at Lewes Realty. Some owners wanted to “jack up prices,” said Jo-Ann Bacher, the rental manager at Jack Lingo Realtor in Rehoboth Beach. “We didn’t do any of that.”
As Memorial Day fast approaches, there’s been a lot of interest in beach properties from the New Jersey and New York area, but early bookings aren’t off the charts.
Adriane Gallagher of Prudential Gallo Real Estate in Lewes talks about beach rentals.
Adriane Gallagher of Prudential Gallo Real Estate in Lewes talks about beach rentals.
[flashvideo file=http://www.wdde.org/wp-content/uploads/2013/05/beach-rentals.flv image="none"/]
That’s not to say that newcomers or repeat visitors should expect to get their pick of places come June. The rental market on the Delaware coast is at least on par with last year, many rental agents maintain. Properties close to the water that meet customer demand are already in tight supply. If you’re hoping for last-minute bargains, you could be out of luck.
“It’s definitely the kind of year where it’s best to book sooner rather than later,” said Linda Parkowski, director of the Delaware Tourism Office. “The economy is improving and people are ready to splurge a little. We also find that each year, more people discover Delaware and are more willing to travel to get here.”
High Hopes
It’s not surprising that tourism officials would expect to see more New Yorkers and New Jersey residents after Sandy.
Real estate agents have seen an uptick in buyers from those states for several years. Drawn to Sussex County for its low property taxes, many are buying second homes now in preparation for retirement later.
In the past year, there’s also been an increase in the number of New Jersey and New York residents seeking information from Southern Delaware Tourism, said Scott Thomas, executive director of the membership-driven association. (He’s also received inquiries from as far away as Columbus, Ohio.)
In part, the increased interest could stem from an improving economy. This season, people across all income levels are expected to travel more for leisure than they did in 2012, according to a report by D.K. Shifflet & Associates, tourism and travel research company.
Whether due to the economy or Sandy’s influence, the Lewes Chamber of Commerce received 842 leads from a response card in an ad published in Great Vacation Getaways, an insert in mid-Atlantic newspapers.
“We’ve been in the ad before, and that’s the biggest response we’ve received,” said Betsy Reamer, executive director of the organization. Requests for information have also spiked at the Rehoboth Beach-Dewey Beach Chamber of Commerce.
But are the calls translating into bookings from vacationers who usually head to north Jersey? While Coldwell Banker Resort Realty has received some inquiries from New Yorkers and New Jersey residents, some have balked at Delaware’s pricing, said Sharon Palmer-Stauffer, vice president and rental operations manager.
“We have higher rental rates than some spots in northern New Jersey,” she explained. Perhaps that is because the Jersey Shore runs nearly 220 miles, from Sandy Hook to Cape May, while Delaware has just 26 miles of Atlantic coastline.
Even after the storm, the Shore has far more inventory, and southern resorts, such as Wildwood or Cape May, weren’t as heavily impacted as their neighbors to the north. Yet according to an article in the Philadelphia Inquirer, the rental market along the southern Jersey coast is currently running about average.
Holding Steady
Like southern New Jersey, Delaware beach resort rentals are doing at least as well as last year at this time. “We might be even a little bit ahead,” Palmer-Stauffer said. And that’s a good thing: Last year, the volume was close to what it was before the recession hit, Gritton said.
Admittedly, it’s not always an apples-to-apples comparison. The inventory has fluctuated as homes move on and off the rental market. During the recession, for instance, some second homeowners opted to rent their property rather than sell it at a loss. With the improvement in the real estate market – and more realistic seller expectations ¬– some of these properties are now off the rental list, Bacher said.
The building boom between 2000 and 2006 also boosted the number of available rental properties, and although less robust than in years past, there is still new construction. Consequently, there generally are rental properties available all summer long, especially if you’re willing to stay west of Route 1.
But the popular places are filling up, and repeat customers in particular are booking earlier in the year, said Adriane Gallagher, rental manager at Prudential Gallo in Lewes. Consider Cape Shores, a community situated on the Delaware Bay near Cape Henlopen, and downtown Lewes, which now have few weeks available in the thick of the summer.
(Most agencies offer loyal customers the ability to book months before new customers get an opportunity to place a deposit.)
Properties with amenities also go faster. “Renters get more sophisticated each year,” Palmer-Stauffer said. They want central air conditioning and Internet access. While some people still see old cottages perfumed with mildew as the ultimate beach experience, others want a rental that’s as nice if not nicer than their own home.
“When you’re going on vacation and spending the money,” Gallagher added, “you want something nice.” Properties that allow pets for a fee are now in high demand. “People want the ability to bring their pet rather than board them,” she said.
Peak months are July and August, and some owners have raised their rents during those months, she said. Most, however, have kept rates the same for the past few years.
Room at the Inn?
Of course, not everyone who stays overnight at the beach wants a rental home. Carol Everhart, president and CEO of the Rehoboth-Dewey Chamber of Commerce, is hearing mixed progress reports from hotels. “A few hotels are up slightly with reservations and some hotels are flat,” she said.
Even so, things are much improved since 2009, when this sector hit a low point, said Thomas of Southern Delaware Tourism. Hotel bookings in 2012 increased 18 percent over 2011, he said. (He based his data on the Sussex County public accommodation tax, the lion’s share of which comes from coastal properties.)
However, it’s hard for hotel owners to predict the season. Unlike vacation home rentals, hotel rooms remain subject to last-minute impulse, a trend that’s shows no sign of waning. Rain can dampen that impulse. People who book hotel rooms are more likely to want a long weekend and not a week, which was the case in the past.
Tourism officials and businesses will have a better grasp of how Sandy has influenced bookings once they’re well into the season – or even come Labor Day, Reamer said.
Gallagher agrees. “I have a feeling it will become more apparent over the summer, because people are waiting to see if properties damaged by Sandy will become available” by June or July, she said.
No matter what happens, the storm has prompted beach businesses and the Delaware Tourism Office to step up their efforts to attract visitors from points north. “If we could serve as a vacation spot for people who had their plans disrupted, we’re happy,” said Parkowski of the tourism office. “If this means more people will be glad to see what Delaware has to offer, that’s great.”