On his very first visit to the Jersey Shore, Chris Marino wasn’t even born yet.
“Technically, the first time I came to the Shore, I was in my mother’s belly,” Marino says.
Now a father himself, Marino, a Bergen County resident, brings his own family down the Shore every summer. He’s also been renting out several properties in Ocean County for 10 years, and has seen the summer rental market survive through trying times. He’s hopeful this season will be no different.
“Even in the bad times—September 11th, the blackout, the market crash—one thing that people don’t do is take their summer vacations away from their kids,” he says.
But as Covid-19 continues to threaten New Jersey, prospects for this summer season remain unclear. Many Shore towns have suspended short-term rentals in compliance with Governor Phil Murphy’s stay-at-home orders. And despite Murphy’s six-step plan for reopening the state, uncertainty persists.
The short-term rental business relies on reservations made up to a year in advance. Disruptions can be crippling. Questions abound: When will beaches and businesses be allowed to open? Will beach access be limited? When will property owners be allowed to start their rentals—and when they do, will renters materialize? Will others seek returns on their deposits?
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Complicating matters is the plethora of separate Shore municipalities, each with their own definitions and restrictions on such matters as short-term rentals.
“For example, as of right now, I know Spring Lake and Sea Girt have suspended [rentals] through June 1,” says Chris O’Neill, rental manager for Diana Turton Realtors in Spring Lake. “It’s town by town, which makes it even more confusing to keep track of, to be able to give our landlords and our tenants answers.”
What’s more, any announcement of a start date for the Shore season is sure to set off a mad dash for rentals.
“If we open up for business for Memorial Day, anyone who wants to rent in June or July will need to jump on it,” says Eric Birchler, the broker owner of Birchler Realtors, with offices in Lavallette, Ortley Beach and Seaside Park. In that case, Birchler predicts that the demand for rentals could easily outweigh the supply. And if suspensions reach through June, or touch July, a last-minute scramble of renters looking to salvage the season is likely.
When concrete reopen dates are established, many preexisting rental contracts will need to be reworked. Some renters will want to postpone their vacations until later in the summer. Others might want to apply their deposits to next year, or attempt to get refunds.
But even amid so much uncertainty, brokers say renters shouldn’t expect any significant cost fluctuation. “Most [contracts] are already done. I don’t see owners giving a discount on existing contracts. And I won’t be recommending any owners raise their prices,” says Birchler, who rents out three properties himself and says he has no plan to change his own rates. “I think the rates will be very similar to what they would be without the crisis.”
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Randy Sinor, a broker at Mary Allen Realty, has been working on Long Beach Island for 35 years. He’s never seen a season shape up quite like this one.
“We’ve got homeowners who decided that they do not want to rent their properties this coming season, and they’ve canceled their guests,” he says. “We have guests who are worried, fearful of what could happen, and we’ve got those folks canceling.”
Around this time in a typical season, Sinor says his cancellation rate for summer rentals would be hovering around 1 percent. “Today, I probably have about a 10–12 percent cancellation rate,” he says. “Economically, it’s very impactful.”
Still, Sinor sees hope for this summer, even if it looks different than what he’s used to.
“I’m pretty hopeful that if we open by Memorial Day weekend, we will have a wonderful season,” he says. “People may decide that they want to come here in September, so maybe those people will get a taste of what that’s like, and we’ll see our shoulder seasons grow because of it.”
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To a large degree, this summer’s fortune is dependent on when—and how—the beaches are opened. That, too, is likely to vary from town to town.
Many Shore towns have currently closed their beaches for any access beyond socially distant walking. Such beach closures could potentially outlast the short-term rental restrictions, resulting in more rental cancellations.
To address renters’ concerns, some Lavallette realtors have agreed to a standardized addendum for any new leases signed this season, according to Birchler. The addendum states that deposits will be returned if, at the time of the lease start date, New Jersey has not lifted its stay-at-home order and/or if the beaches remain closed.
But elsewhere, some renters seeking refunds may find they have no recourse: It’s unlikely that most rental contracts anticipated the possibility of state orders to close beaches.
Wildwood Mayor Pete Byron says he has received calls from renters who fear losing their deposits. He says the issue is out of his hands, but acknowledges, “We’ve never had anything like this before. Most leases do not have anything referencing something like this as a reason to get your money back. Now it comes down to who’s going to blink first.”
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Birchler, who took over his family business 15 years ago, says this season was shaping up to be a beautiful, bustling one—until Covid-19 hit the state like a tidal wave.
Renters typically pay for their summer retreats in two or three deposits. The first payment, Birchler explains, often happens sometime between November and February. The second usually hits homeowners’ accounts around April and May. But this year, the lack of clarity surrounding rentals has resulted in a lack of cash flow. “All the owners that rely on this money to pay their mortgage payments—all their money stopped,” he says.
The longer the statewide lockdown, the greater the threat of financial hardships. The possibility of a rental suspension continuing into September is “a doomsday scenario,” Birchler says. In that case, his brokerage—as well as several other smaller, less-established firms at the Shore—could go out of business without supplemental funding.
Homeowners who rely on summer rental income could also be in jeopardy. “A lot of them are retired and have mortgages on these homes,” Birchler says. “If the rents go down 10–20 percent, that’s tough. But if they go away completely, and the banks don’t forgive those loan payments, then there are going to be foreclosures.”
Still, there is hope that the 2020 season could turn out strong. In fact, uncertainty around other forms of travel could even make Shore staycations more appealing than ever to residents of New Jersey and nearby states.
That vision is shared all the way across the state in Trenton.
“I want to see the Shore humming throughout the summer,” Murphy said in a press conference on April 27. “We will move as quickly as we can. But as safely as we must.”Click here to leave a comment