Did Shore house owners push their luck with high rents? Prices are dropping and weeks are open.

Last summer, her Shore house in Avalon fully booked, Katie Leighton took the family on a vacation to Europe. But this summer, a gaping hole emerged in prime season as some of her regular renters decided to take their families to Europe.

So she and her family spent a lovely week at the Jersey Shore.

“My kids have never spent a week at the beach at high season because it was always rented,” said Leighton, of Wilmington. “They were doing cartwheels.”

After three summers of a pandemic-bloated crush of demand that filled up Shore homes, created new investors, and pumped up rental and sale rates, things this summer are quite different. Unheard of in past summers, weeks are going unrented, and rental prices are dropping.

Shore house owners may finally have pushed their luck.

Maryellen Sheehan, who owns five Shore houses in Ocean City and manages others, says the market has definitely softened this summer.

One owner of a home she helps manage dropped a prime week’s price of a five-bedroom place with ocean views from $10,000 to $5,000 in order to get it booked.

Another regular called from Italy and wanted to cancel his reservation to stay another two weeks. (The answer was no, so “they came back from Italy.”)

“They typically start with a small reduction,” Sheehan said, “but as the week gets closer, it’s better to get something than nothing.”

It’s a big deflation from the last three summers, when it seemed nobody went anywhere else but the Shore.

But as owners raised their rates, people began to balk.

Madeleine Parkin of AirDNA, a company that tracks 10 million short-term vacation rental data on platforms such as AirBnB and VRBO, says average daily rates for the entire Jersey Shore rose 9.2% in July to $658.37 a night, compared with a year ago.

This actually represents a slight slowdown from June, Parkin said, “as occupancy was a little more under pressure, obliging some hosts to lower their rates.”

No wonder Duane Watlington has an active page of “special deals” on his Vacation Rentals Jersey Shore sites. Facebook groups such as Ventnor/Margate Rentals and Main Liners Shore House Rentals are littered with owners dangling last-minute rates.

Watlington says the “special offers” tabs on his series of websites, (including Vacation Rentals LBI, Vacation Rentals Wildwood and Vacation Rentals Ocean City), are humming with discounts of all types, including no cleaning fee, and discounted rental rates of 25% or more.

Everything at the Jersey Shore is relative, however.

One property on Long Beach Island, a six bedroom in Sea Spray, is advertising this offer on Vacation Rentals LBI: “Save $2,000 on last remaining prime weeks August 19th - 26th (reduced rate $18k), August 26th - September 2nd (reduced rate $16K) and Labor day Week Special September 2nd - September 9th (reduced rate $10K).”

“We’ve returned to normal is the best way I’d describe it,” says Watlington. “We had a COVID bump in ‘20, ‘21 and ‘22 which was great because we introduced a bunch of people to the Jersey Shore. Unfortunately, in some affluent markets like Long Beach Island, people could get whatever rates they wanted. They might have raised them too high.”

Watlington says that he saw more traffic to his websites this year, but fewer inquiries, “which signals to us that they’re not finding value.”

AirDNA data show slight decreases this summer in occupancy rates, while still remaining high, in places such as Ocean City, Sea Isle and Beach Haven, Parkin said.

Overall, she said, there were 5,174 available listings at the Jersey Shore in June, down to 4,988 in July. This still represented a 13% increase in availability from a year earlier, possibly reflecting an increase in investors new to the market. Demand did not keep pace, she said.

”Things have opened up,” said Sheehan, the owner in Ocean City. “People are either in Greece or Italy. This is the year people decided ‘let’s do it.’”

She agrees that some owners overpriced their Shore homes, especially recent buyers saddled with big mortgages.

“Owners also struggle with do we rent it, or just come down and use it ourselves,” she said. “Is it worth it to rent it at that price?”

Tara Hargenrader of Renting Wildwood, a site that manages about 45 properties, says owners who purchased high are finding it hard to cover their mortgages.

“Last summer, at this point in time, it was near impossible to find a place,” she said. “This year, a lot of people are coming to me because they still have weeks open in August. I’ve had 10 new clients just this week alone.”

As newer buyers increased their rents, those who purchased before 2019 also began raising rates, Hargenrader said. “They’re looking at the guy across the street who’s getting five grand a week and saying why not me,” she said.

Now, she said, there’s been a reckoning.

“I’ve had a lot of owners saying, ‘I think we’re pricing out the market,’” she said. “‘Maybe we’re going too high.’”

Alternatively, renters are squeezing into smaller places, staying for fewer nights. And compared to other Shore towns like Avalon and Stone Harbor, towns like Wildwood, with weekly rents ranging from $1,400 to $4,900, always look like a good deal.

In Ventnor and Margate, owner Rebecca Lerman, who owns and manages 13 properties, says there’s “a lot more vacancies, and a lot more inventory, no question about it.”

“I do think the prices are going to stabilize and go down,” she said. “I have seen people who have vacancies, and they’re like giving it away. They would rather it get rented than sit empty. I’ve never seen it before at this point in the summer, that people are still trying to rent their houses.”

Katie Leighton says people will return. The adventures they had in Europe all amounted to a memorable family trip, but maybe not one to do every summer.

“Barcelona, Malaga, Lisbon, you can read about how crowded that is this year,” Leighton said. “A lot of people are over there experiencing that experience. But they’re coming back to the Jersey Shore. ... 250,000 steps, 120 miles. — It’s not a vacation, so much as an experience.”