PROVINCETOWN — When Anna Leister bought a small seasonal cottage on the Wellfleet-Eastham line at the outset of the pandemic, she wasn’t looking to make money. Leister lives in Braintree, but she grew up in Provincetown. She was priced out here, she said, but she still “wanted a little piece of Cape Cod” for herself. She uses the cottage on weekends and rents it out for two summer months to help defray costs, she said.
“We were a little nervous about whether or not we should purchase this,” she said. “We didn’t know what was going to happen with the market. I don’t think I need to tell you what happened,” she added.
Leister was one of many Outer Cape property owners who found startling success renting in the short-term vacation market as remote work and fears of coronavirus contagion drove people from across the eastern seaboard here. Prices skyrocketed, and landlords began to see their properties fully booked even in the off-season.
Now, with inflation and an increased supply of rentals, the pandemic boom is wearing off, and those landlords are beginning to sing a different tune. Though prices remain high, bookings for this summer have dipped compared to this time last year, reflecting a cooling market.
“This year, I am noticing a lull,” Leister said. In previous summers, her cottage would be booked up by early June at the latest, she said. Now, of the nine weeks she offers for rentals, three are unbooked.
According to Ryan Castle, CEO of the Cape Cod and Islands Association of Realtors, bookings between Memorial Day and Columbus Day in Wellfleet, Truro, and Provincetown are down 19 percent from last year, while prices in those towns have risen 19 percent.
Data provided by AirDNA, a company that collects information from short-term rental platforms Airbnb and VRBO, suggest a similar story. According to AirDNA, nights booked in June through September across the four Outer Cape towns have fallen 8 percent compared to the same time last year. At the same time, prices have risen 12 percent.
In Truro, according to the AirDNA data, bookings have fallen 13 percent while prices have risen 21 percent. Wellfleet and Eastham, which saw little change in the number of bookings, experienced a rise in prices of about 10 percent, while Provincetown saw its bookings dip by 9 percent and prices rise by 5 percent.
Castle collects his own data, mostly from other rental companies around the Cape. Many properties are listed with both Airbnb or VRBO and traditional realty firms, making precise measurements of the rental market difficult.
Nevertheless, Castle’s numbers reveal an overall downturn in vacation bookings on the Outer Cape, with some homeowners finding their previously hot properties vacant for the first time in years.
Joe DeMartino, who has been a broker in Provincetown for 20 years, said rising prices and the local rental tax are giving some potential vacationers “sticker shock.” For high-volume dates like the Fourth of July, Carnival, and Bear Week, he said, typically all his properties are fully booked by April 1.
This year, he still has 10 properties available for the July 4 weekend — something he said has never happened to him before.
Susannah Elisabeth Fulcher, a contributing writer for the Independent who rents out a couple of rooms in her Wellfleet home through Airbnb, said she was fully booked in 2021 and 2022. “Everybody wanted to come to Cape Cod, it seemed,” she said. “This year, it’s different. It’s slower, and we have more gaps.”
Both Fulcher and Leister said other property owners they know are experiencing similar lulls.
But not all homeowners and rental services are feeling these effects equally. Luke Chapman, the CEO of the Orleans-based rental service Del Mar Vacations, said his company is on track to hit 99-percent occupancy in July and August — which he attributed to superior marketing and hospitality.
“There’s professionals, and there’s amateurs,” Chapman said. In July and August 2021 and 2022, “a kindergartner could’ve booked a house,” he said. Now, homeowners can’t expect to simply “toss a house on Airbnb” and see it fully booked, said Chapman.
He said Del Mar, which pays homeowners a flat fee and sets its own rental prices, has lowered prices on only a handful of properties in its portfolio.
Jim Reese, the chief operations officer at the vacation rental site We Need a Vacation thinks an adjustment is ahead. As pandemic-era splurging fades away, he said, “vacationers will pull back, and homeowners will adjust accordingly. They’ll recognize what vacationers are willing to spend for their homes.”
Besides inflation and belt-tightening, another reason for the lull here may be the stark weakening of the Euro against the dollar last year. That has meant that for some vacationers booking a jaunt to Spain or Italy is cheaper than a week on the Outer Cape. “We’ve had more than one tenant tell us that they can go to Europe for less,” said DeMartino, “and it’s true.”
Reese said he expects prices to readjust to their prepandemic trajectory, a steady growth of about 3 to 4 percent per year.
DeMartino said he has been telling homeowners he works with to consider lowering their prices. But so far, prices for Airbnb and VRBO rentals are remaining well above both 2022 and 2021 levels, according to AirDNA.
“I think the question becomes each individual homeowner’s decision,” Castle said. “Are they willing to cut their prices to get more weeks booked, or are they willing to have weeks vacant?”
Terry Hochman, who owns a Truro condo rented through the Braemar Condominium, has no power to set his own price for his unit, which he proudly markets as “The Winds of Truro.” But Braemar’s high rates have not proved to be an issue for his tenants. Although he has 10 fewer nights booked compared to this time last year, he said his revenue is down by only $100.
But Fulcher, who has lowered her prices to prepandemic levels, said she feels “more comfortable” renting at a more reasonable rate.
“I’m okay with it for myself,” she said. “I like having the people that can afford to come because of what we do at our place.”
