In 2020, travel was restricted by the pandemic, and many people could work from anywhere. For those who could afford it, a close-by second home on the Maryland and Delaware shores looked like a good investment for short-term rental income and as a work-from-anywhere remote option.
As a result, inventory for sale in those vacation destinations, and others around the country, got extremely tight, sales began happening much more quickly and prices rose dramatically.
Fast forward three years and the market has shifted.
In May, listing service Bright MLS says almost one-third of homes that sold in the Mid-Atlantic were second-home and investment properties.
“We saw some people who purchased second-homes or vacation homes during the pandemic, and thought they would be able to use it a lot because they were working from home,” said Lisa Sturtevant, chief economist at Bright MLS. “But now as more employers are calling people back to the office, they are taking the opportunity to list those homes.”
Another reason for the increase in second-homes and investment properties for sale is the change in the short-term vacation rental market that, while still strong, is not dizzyingly so like it was two or three years ago.
“That short-term rental income was really high,” Sturtevant said. “People were traveling a little bit, but didn’t want to stay at hotels, so they were staying at this short-term rentals. We have seen revenue from these short-term rentals begin to decline.”
The vacation rental business isn’t as carefree as it was either. Jurisdictions, and even vacation rental platforms, have been placing more restrictions on those rentals.
For potential buyers looking for a vacation home on the Eastern Shore, there is a bit more to look at as a result, but buyers should not expect bargains.
“If you’re looking for a beach condo or a home at the beach now, you’re going to find more inventory than you did a year ago,” she said. “It is still tight, but we are seeing more listings come online. We are still seeing prices holding pretty firm because even as more inventory is coming online, we are still at near historically low levels of inventory.”
The number of active listings in May in the Delmarva region was up 30.4% from a year ago. The months of supply based on current sales trend is up 72.5% from a year ago, though still a lean 2.44 months worth of inventory, according to Bright MLS data. The median price in the region in May was down 0.5% from a year earlier, the first year-over-year drop since May 2020.
