From the low end to the high, the rental season is off to a slow start, or so brokers say. Some blame it on the weather, others on the strong sales market. Houses usually rented by this time are still awaiting contracts.
As for the weather, consider this: “I kept a snow shovel in my car all winter,” said Diane Shifman of Rosehip Partners. As for how the sales market affects rentals: “When sales are down people rent, when they’re up renters buy,” said Dawn Neway of Douglas Elliman. The sales market is so strong now that several of her past rental clients have taken the leap to become homeowners. That leaves fewer people in the rental pool and a surfeit of inventory.
“People are deferring their decisions this year,” Gary DePersia of the Corcoran Group said. “They’re deciding a month before they move in. I just did a July-through-Labor Day rental today,” he said Sunday. Mr. DePersia, who concentrates on the high end, is surprised at the number of houses still available on the cusp of Memorial Day. He rattled off listings that in earlier years would have been rented by now:
A house on North Haven on a private peninsula “graced by 650 feet of water frontage and over 200-degree panoramic water views,” according to its listing, is rented for August, but might be considered a veritable steal at $175,000 for June and July, given how much certain rentals are going for south of the highway. An 8,500-square-foot house on two acres on Cobb Road in Water Mill is still available for $595,000 for the season. A 7-bedroom, 12-bath house on First Neck Lane in Southampton at $600,000 for the season remains listed as well.
And there apparently are many others on the high end. In the Fordune enclave, a 12,000-square-foot residence with two gambrel roofs belonging to Rick and Kathy Hilton (whose children are the famous ones in the family) is still listed at $425,000 for the season.
Perhaps the piece de resistance is Linden Estate, a Southampton compound with a 30-room, 18,000-square-foot “Cotswold-style mansion” designed in 1902 by Grosvenor Atterbury, with a wine cellar-tasting room and connecting greenhouse. The estate boasts a grass tennis court, paddle court, boccie court, and indoor pool and spa. The asking is just under a million for the season — $950,000.
In Water Mill, the Rose Hill Estate comes with all the upscale amenities considered de rigueur these days, but with a Culinary Institute-trained chef. It’s $800,000 for the season.
Let’s face it, the market for such excessively expensive rentals is complicated. “In many cases, the very wealthy rent to avoid tying up multimillions in a house,” reads an article in the Elliman Spring-Summer magazine. “For some, $1 million for a rental is considerable; for others it’s a bargain.”
All this is not to say there weren’t early birds who rented by January. The brokers say that a lot of lower-end properties, those taken by groups of young couples or surfers, are gone. “Montauk rented early,” Ms. Neway said. She admitted being surprised that there is a lot of inventory available in the Amagansett Dunes, where “there’s usually nothing left by now.” She mentioned one house on Surf Drive ($85,000) and another on Whalers Lane ($120,000), each with heated pools. Anything with a pool in the Dunes, she said, “is usually snatched up right away.”
For the past three years Ms. Shifman has rented out a three-bedroom, three-bath house in Springs with a heated pool for $35,000 from July through Labor Day. Not so this year, at least so far. “Not only have I not rented it, but no one else has either.”
Although she has had a ton of repeats, new clients tend to be “much more picky,” she said. “They’re waiting to get a steal, but the landlords are still holding out.” At least for now.
Another factor at work is a trend toward shorter rental terms. “When I started out here 19 years ago Memorial Day to Labor Day was a staple of my business,” Mr. DePersia said. These days he’s handling more one and two-month rentals than ever before. “People have come to realize they don’t need to be here in June.” He cites colder spring weather, events like graduation that take renters elsewhere, and kids “who have other things they want to do.”
Patty Wadzinski of Sotheby’s International Realty has also seen tenants preferring the “beautiful weeks in July or August” rather than a full season. Homeowners are sometimes attracted to short-term rentals for other reasons. “Anything less than 14 days is not tax declarable,” she said. “It’s considered ordinary income.” But that can only be cited once a year, she is quick to point out.
With some renters shying away from spring, Ms. Wadzinski said, homeowners are considering “extended leases in front or back.” September with its glorious days, cool nights, and fewer crowds “holds a much stronger value than spring,” she said.