For the past two summers, Hamptons home owners had prospective tenants at their mercy. This year, it’s the renters who have leverage.
A surge in the supply of rental properties and a drop in the number of renters has weakened the summer market for landlords, CNBC reported. Miller Samuel CEO Jonathan Miller said median rental prices in the Hamptons fell 26 percent in the first quarter, and although that’s the offseason, it appears to be a harbinger of a lukewarm summer.
According to brokers, some owners are slashing asking rents by 30 percent or more to fill their properties.
“There is a tremendous amount of inventory and people are not renting it,” Douglas Elliman’s Enzo Morabito told CNBC.
Hundreds of properties remain available for the summer, brokers said. It’s a stark contrast to the previous two years of the pandemic, when folks looking for vacation spots close to home flooded the market even more than usual.
This year more appear ready to travel abroad as borders continue to open and pandemic restrictions ease around the world. Europe and Asia weren’t as available the past two summers as they are now.
Another potential cause for the cooling rental market is that the surge of buying has turned many renters into owners. Not only are they out of the rental market, but some have put their newly purchased homes up for rent, adding to the supply.
Other factors include economic turmoil and stock-market declines, which have renters offering less than they otherwise would. And asking prices remain inflated, despite the market having turned down, leading many rentals to sit on the market.
Some rental owners in the Hamptons shot for seven-figure paydays for the summer season, more than $1 million per month in some cases. That pricing is beginning to look aspirational.
Last summer, there were 16,645 bookings from Memorial Day to Labor Day tracked by StayMarquis, totaling $117 million. That was an increase of 9 percent from the previous year.
The market could still rebound as the summer moves along and last-minute vacationers assess their options. At least that’s the belief of some brokers, including one who told CNBC the market is beginning to pick back up.
[CNBC] — Holden Walter-Warner