Cape Cod rental prices are dropping. Here's why.
CAPE COD - If you have been avoiding pricey Cape Cod rentals in the past then this may be your year to take a vacation. Prices have been dropping the last few years, and that trend is expected to continue.
More rentals than New York City
Cape Cod is teeming with rental properties. The Cape Cod Chamber of Commerce says there are more than 18,000 short-term rental properties on the Cape. They say that sum is more than in New York City. Part of the reason for the spike is COVID. People fled to the Cape and bought homes to escape pandemic lockdowns, but now that COVID has slowed down, and the Chamber says more people are renting or selling. This is increasing inventory and helping the price go down.
Rental price spiked during COVID
Chamber of Commerce numbers for July show that the average daily rental price spiked in 2021 to almost $387.32. Chamber CEO Paul Niedzwiecki says a lot of people bought second homes on the Cape during the pandemic. He believes the heightened 2021 rental price was from property owners choosing to use their own rentals that summer rather than renting them. The usage lowered the available inventory. Their data shows that in 2022 the daily price plummeted $100 as owners began to rent their properties again. Niedzwiecki is calling it an overcorrection of the market that they expect to continue.
Demand remains high
While the prices are dropping, demand on the Cape remains sky high. Occupancy rates have been dropping in July the last three years but remained above 70% last year despite the boom in inventory. Niedzwiecki says there are more than 2,000 more rental properties this year alone. He attributes that to the people who bought homes during the pandemic, now returning to work, and renting or selling their homes for the summer.
Desiree Antonio owns two properties. Their Sandwich property has been on the rental market for a few years, but their new property in East Sandwich recently hit the rental market. The new one sits 200 steps from the beach, while the Sandwich property is closer to shops and restaurants.
"That [Sandwich] one books really fast and has the last couple of years. This newer property, we have only had it just a few months. It's not booking as fast, even though they have had some activity. That's probably due to saturation in the market and economy," explains Antonio. "I see personally a lot more renters asking for more details, and they want more information and more amenities. I think we are just having to work a little harder to gain the market."
The Antonios still have availability in key months like July and August. They expect to be booked up.
"A couple of years ago there was a big bidding war for houses, and you couldn't buy a house in the realm of what it was being listed for," remembers Antonio. "That has slowed down, but it had heightened the rental opportunities. You have to really stand out now."
If you are someone looking for a vacation now may be the time to capitalize. Prior to COVID, the average price in July was $272 a night. The market may be continuing to drop toward that older norm.