Several weeks ago I commented on a Business Week article here. At the time I was pondering what the impact of the economic crisis was going to have on our second home market. I, quite honestly, had thought that there would either be a large jump in population as people pursued early retirement, or there would be an extra number of homes hitting the market as people were forced to divest.
The New York Times has raised a third possibility, second homes flooding the vacation rental market. This possibility has both positives and negatives. On the positive side, the already depresssed real estate market is spared more distressed property sales. The negative side is that there will be an expanded number of properties competing for a limited tourist market – placing added financial burdens on an already troubled tourist industry.
The article had some other information on tourist travel that I will cover in my next post.
As I previously noted, there is an anticipated 8% drop in tourism travel for the coming year. This is coupled with a 15% reduction in discretionary spending. Combining these decreases with more rental properties cannot be good for the Dennis motel industry. These second home rentals also raise ancillary impacts – tied to the reduction in discretionary spending. Second homes are larger, more spacious and provide multiple bedrooms for the whole family. Second homes also have kitchens. All making them more attractive than a motel, allowing for a more frugal vacation, and allowing tourists to forgo our many fine restaurants.