Sea Isle Housing Market Shifts Away From Rentals

By Donald Wittkowski Sea Isle City’s evolution into an upscale resort town featuring multimillion-dollar vacation homes lining the beachfront and bays is certainly good for its image. But is it also good for business? As the city becomes more affluent, a trend is emerging in which wealthy second-homeowners are using their houses exclusively for themselves instead of renting them out to visitors for weeklong summer vacations, local business leaders say. The result? Fewer visitors are coming to town to spend their money at the local restaurants and retail shops, according to the Sea Isle City Chamber of Commerce and Revitalization. “The economic impact of second-homeowners versus transient visitors is mind-boggling,” said Christopher Glancey, the Chamber’s president. Sea Isle’s transition from a rental market to one having more second-homeowners is drawing comparisons to the high-end Cape May County seashore retreats of Avalon and Stone Harbor. “I think we’re becoming Avalon and Stone Harbor, what they were 25 years ago,” said Mike Monichetti, owner of Mike’s Seafood & Dock Restaurant, one of the family-owned eateries in Sea Isle’s historic Fish Alley neighborhood. Monichetti added, “I see Sea Isle changing right in front of our eyes.” Mike Monichetti, owner of Mike's Seafood and Dock Restaurant, believes the change in the housing market is making Sea Isle more like Avalon and Stone Harbor. Underscoring the shift in the market, the number of housing units in Sea Isle has climbed from 5,000 to 7,000, but rental permits have plummeted from 2,500 to 1,300, according to the Chamber of Commerce. During their monthly board meeting Oct. 2, the Chamber members discussed the implications of those statistics – especially what they mean for the local business community. Glancey noted that Sea Isle has been losing visitors over the past 15 years because more second-homeowners are choosing to keep their vacation houses for themselves the entire summer rather than renting them out. Unlike the renters, who venture out to spend their money at local restaurants and retail shops, the second-homeowners are more inclined to stay at their houses because they have all they need there, the Chamber members pointed out. “They’re staying in their house. They’re home partying and enjoying it,” Monichetti said. In light of the housing shift, Monichetti believes the Chamber may need to make changes with its marketing strategy to attract more visitors. Upscale vacation homes overlooking the beaches and bay are a hallmark of the Sea Isle housing market. Sea Isle’s weekend business remains strong, but the Chamber is looking for ways to draw more tourists during the traditionally slow Mondays, Tuesdays and Wednesdays. City Councilman William Kehner, who attended the Chamber meeting, suggested that perhaps second-homeowners could be encouraged to offer rental discounts during the slow days to attract short-term vacationers. That would allow homeowners to expand the rental market during the weekdays, but preserve their houses for themselves on weekends, he noted. “Ideally, we need short-term rentals, no doubt about it,” Kehner said. Glancey, a real estate developer, said he has been using rental discounts on weekdays to book short-term vacationers at the condominiums he owns in Sea Isle’s Townsends Inlet section. He wants more realtors in town to adopt the same pricing strategy at the properties they rent out. Christine Ostrander, a representative of the Cape May County Department of Tourism, urged the Chamber to explore new markets for more visitors. For instance, she suggested forming partnerships with the campground operators in the mainland communities to have them send their guests to Sea Isle. Glancey mentioned the possibility of running shuttles between Sea Isle and the campgrounds to bring more visitors to the island. “We need to push,” Glancey said. “We need to increase the number of transient people to come here.” The Chamber of Commerce will look to tap new markets to draw more visitors to Sea Isle. In the meantime, the Chamber and the city have been focusing on Sea Isle’s fall and winter entertainment lineup to continue drawing second-homeowners and visitors during the off-season. Festivals, parades and other family-friendly special events will be held on weekends right through New Year’s Eve and into spring. “During the shoulder seasons, residents and visitors have the opportunity to expand the good times of summer and make the most of the nice weather,” Sea Isle Public Information Officer Katherine Custer said in an email. “In addition to giving a boost to our local businesses, autumn and spring events remind people that the fun in Sea Isle City doesn’t simply begin on Memorial Day and end on Labor Day, because we have events taking place throughout the year.”