After three years of through-the-roof demand for summer rental properties, fueled by the global pandemic, real estate agents are reporting a sluggish 2023 summer rental season in Northwest Connecticut.
They attribute the market’s lackluster pace to lifestyle changes and other factors that have caused a glut of available rentals in some towns, including Sharon and Salisbury, as a result of a buying frenzy during COVID-19.
Steep rental prices, coupled with a return to the workplace and renewed interest in international travel, have also negatively impacted the vacation rental market.
“Two years ago, Litchfield County was pretty popular and now people have a lot of other options. Instead of staycations they are exercising their ability to travel to faraway places again,” said John Harney, an agent with William Pitt Sotheby’s International Realty in Salisbury.
A July 5 MLS listing for seasonal rentals in Salisbury and Sharon reveals that of the 37 summer rental properties on the market, 21 were available, 13 closed and three were under contract.
“It’s looking like about 50 percent are not rented,” Harney noted. The monthly rental price for those properties range from $3,500 to $40,000.
July and August are traditionally the strongest months for summer rentals, the Salisbury real estate agent explained, and in the past tenants have booked vacations far in advance. But not this year.
“Who is still up in the air about what they are doing the next six weeks between now and Labor Day?” Harney said. “It’s either you are going to have your rental sit unoccupied for the next two months or you can adjust your pricing.”
The Salisbury agent described the Northwest Corner rental market as “fairly bullish, with low inventory. With interest rates going up, I thought there would be a drop and restructuring of prices downward, but that does not appear to be happening.”
Lifestyle changes impact market
Graham Klemm, president of Klemm Real Estate in Washington, said lifestyle changes are impacting the seasonal rental market, particularly when it comes to tenants’ length of stays, which are getting shorter.
“The rental market is soft versus 2022, but they are seeing a simar trend in the Hamptons,” Klemm noted. “People’s lives are much different than they have been in the past. I think husbands and wives, or partners, both have careers now. It used to be that one of them came up here to live and the other came up on Thursday through the weekend,” the broker noted.
At one time, he said, tenants would book rentals for the entire summer season. “Then they wanted one month, max. And now they are looking at less than one month. The difference is, people are traveling to a large extent, whereas they haven’t been able to in the past two or three years.”
An April 2023 report from AAA found that this year, as pandemic rules and restrictions fade away, international travel is up 200 percent compared to 2022, international bookings have jumped 300 percent and the increase in demand for airfare has driven ticket prices for international trips up more than 30 percent.
County data snapshot
According to a second quarter 2023 MLS report provided by William Pitt/Julia B. Fee Sotheby’s International Realty on single family rentals in Litchfield County, inventory was at 173 as of June 30 of this year, showing an increase over the past two years. By comparison, reported inventory was 130 during the same period in 2022, and 104 in 2021.
Despite the availability of rentals, interest from would-be tenants is lukewarm, statistics show.
The number of units, or successful rentals, recorded in second quarter 2023 was 66, compared to 83 in 2022, and 75 in 2021; volume during the same period was $591,963 as of June 30 of this year, compared to $991,795 in 2022, and $1,065,342 in 2021.
Second quarter data also shows that average rental prices in Litchfield County are trending downward. The price dipped from $14,205 in 2021, to $11,949 in 2022 and $8,969 as of June 2023.
Pools rule with summer renters
Despite the market challenges, Klemm said this year he “did double the rentals in 2023 compared to any other Litchfield County brokers.” All things considered, he noted, “There are very, very few rentals on the market left available for the month of August, especially those with a pool.”
On average, he said, rental properties with a pool demand about $25,000 monthly or more. “Pools tend to pay for themselves over time,” noted Klemm.
The rentals that languish the longest are those without water features, said agents.
Harney said pools and lakefront properties are a must-have for most seasonal renters, and homes with them tend to list at much steeper rental rates. “You cannot be asking those kinds of dollars without water or lakefront,” he explained.
Klemm attributed the lack of available properties with pools to the fact that many people who purchased summer homes in the area during the pandemic are staying put.
“I think it brought a whole new cadre of people here,” said Klemm. “It’s very similar to what we are seeing on the sales front. When a property comes onto the market and checks all the boxes, it sells with a bidding war. Instead of renting, they are purchasing houses and investing in the future.”
Klemm said he has seen monthly rentals increase from about $15,000 a month a decade ago, to $25,000 and higher today, depending on the size of the home and its amenities.
Lakefront properties, once highly coveted by renters, seem to have “gone out of favor,” Klemm noted. For safety reasons, he said, “people with little kids don’t want to rent on a lake, and the water is always freezing except for maybe a few days during the season. Many, many want a pool, no question, and they have similar requirements when renting as buying.”
Renters also are seeking neat and tidy, white and bright, turn-key properties, said Klemm. “Tenants tend to be younger and have a much simpler aesthetic,” preferring newer builds over dark, aging cottages filled with a family’s personal items.
Summer rentals scarce in Kent
In Kent, summer rental inventory is practically nonexistent, according to long-time real estate agent David Bain, owner of David Bain Real Estate.
“We’re not seeing a glut in Kent, or Cornwall,” Bain said in early July, noting that it is very late in the season for people to be booking vacation spots.
“We have not done a whole lot of summer rentals this year. There just hasn’t been the demand. We are not seeing many upper-end houses offered for rent at all. There is nothing currently available in Kent to rent, except for a few low-end properties.”
But when a rental property does become available, he said, it is not unusual to have five, 10 or 15 showings in the first week. As is the case with single-family home sales, Bain noted, “there are so many people on the sidelines that they disappear within two to three weeks, unless it’s overpriced.”
