Rentals for this summer have increased by 20% compared to last year, according to StayMarquis, a rental management company. The average nightly rate has fallen from $1080 in 2022 to $970 this year. Compared to last year, both agents and renters reported a 15-25% decrease in prices.
One reason for the abundance of rentals is that fewer owners are choosing to sell their properties. Kristy Naddell, a Hamptons and North Fork agent at Douglas Elliman, stated that 75% of people she sold property to during the pandemic are now choosing to rent instead. She explained that these homeowners were able to secure desirable mortgages during the pandemic, and now they find renting more appealing than selling.
There are other challenges facing the Hamptons rental market beyond the impact of the Canadian wildfires. International travel has resumed and landlords not setting realistic prices contribute to the market's inefficiencies.
East Hampton North has experienced the biggest impact of rental inventory increase, where half of all summer rentals are located. StayMarquis offers homeowners in the Hamptons a way to bypass the management of their Airbnb or VRBO listings and the responsibilities that come with the guest turnover process. Some agents, such as Kristy Naddell have found a referral fee from StayMarquis to be more valuable than a commission on a lease for rentals under six figures.
The listings on StayMarquis vary, from a Sag Harbor bungalow with two bedrooms and two baths rented for $164 per night to a seven-bedroom and nine-bathroom house in Amagansett that costs $15,000 per night. Jeff Pinsky, an advertising executive who recently constructed an investment property in Westhampton, became a StayMarquis client after he struggled to find a renter for the entire summer. Once StayMarquis took over and offered shorter-term rentals at dynamic prices, he was able to book his home for half the summer.
The market for longer summer rentals is weakened, and Hamptons homeowners are also facing a labor shortage, which is compounded by the area's lack of affordable housing. When it comes to finding a property management company that can provide year-round upkeep, Elliman's Naddell suggests it is the best solution. However, affordability remains an issue in the local housing market and finding services to fix something on short notice is no guarantee.
In response to the Canadian wildfires, legal solutions in rental contracts might replace management solutions. During the pandemic, Scholz explained that people added force majeure clauses to their rental contracts to protect themselves against unexpected illness. Scholz says that if the wildfires persist, people may try to add similar provisions.