Vacation Home Sales Sizzle, Rentals Booking Fast
In the kitschy community of St. Michaels on the Maryland shore, businesses are gearing up for the official start of the season, Memorial Day weekend. Trucks carrying dozens of bicycles are unloading into waterside racks and shopkeepers are moving their bright-colored wares out onto the sidewalks. For real estate rental agents, however, the hard work is largely done. The biggest houses already are booked.
"Those houses do tend to book up in January," said Deborah Lipscomb, owner of Eastern Shore Vacation Rentals. "Because of the Jersey Shore and the things going on there, we are seeing more of a demand for this area."
The recession hit homebuying in this area, which actually increased competition in the rental market, but that may be about to change. Low mortgage rates, returning consumer and investor confidence, and the new migration from New Jersey are all combining to turn this Maryland market around. "We're getting the calls again from people looking to really buy -- buy into the market and start renting again," said Lipscomb.
The impact of Hurricane Sandy is less apparent farther south on Hilton Head Island in South Carolina. "It's a great time to buy, it's a bad time to sell, is what I tell people," said James Wedgeworth, who has been selling real estate on the island for over a decade. "There is a light at the end of the tunnel. "The rental market on Hilton Head, which largely caters to the golfing set, has remained strong throughout the recession, likely because so few people wanted to buy. Confidence is slowly returning here, but prices are not.
"It hasn't really started going up, but at least it's not going down. We had seven straight years of prices going down. That's no fun," added Wedgeworth.
Vacation home sales rose 10 percent nationally in 2012, according to the National Association of Realtors, but as with all things real estate, location is key. Prices are just stabilizing in South Carolina, but in the tiny towns of eastern Long Island, N.Y., better known as the Hamptons, home prices are roaring back and rentals are fully booked for the season.
"We've seen bidding wars in the four-to-five-million-dollar range as well as in the overall market," said Laura Nigro, a real estate broker in Bridgehampton. "It's so much better than when the 2008, 2009 economy shrank and people were very much afraid to invest in anything." Nigro pointed to the potential of rising mortgage rates as the key driver. She said the Hamptons are not seeing too many migrants from the Jersey Shore. The newest clients are coming from much farther away: China.
"In the Hamptons, there is a new influx of Chinese buyers. In the past, they haven't been prevalent in this Hampton marketplace, but this season, for whatever reason there is, they are out looking for properties," she said. Neither the Chinese nor the locals seem particularly concerned about more storms coming to the coast. Potential buyers are, however, looking more closely at FEMA flood requirements and coastal erosion zones, according to agents, but they are still ready to buy.
On Hilton Head, James Wedgeworth said clients are asking more questions about storms, but he has the perfect answer: "If you look at a NOAA map of all named hurricanes since 1950, the safest place, believe it or not, is Jacksonville, Fla., to Hilton Head. For whatever reason, they always hit up north."
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