As a realtor, focused on helping buyers find vacation homes they can also use as STR, I keep an eye on the market and help identify trends that can help my clients. As one measure of the health of the market for vacation homes in the Poconos, I tag communities as STR-friendly (indicated with a green light) and keep a tally of available homes in these communities. At the end of July 2021, there were just over 400 homes for sale in STR-friendly communities in the Poconos. This number of STR-friendly homes for sale declined steadily for the rest of the year, reaching a low of 210 at the end of January 2022. Inventory then started increasing and by early May 2022, the number passed 400. Today (end of July 2022) that number sits at 575. In my opinion, the market is balanced when this number is closer to 750, so we still have a long way to go.
Prices remain high. The lack of availability has pushed prices to historic levels and buyer demand remains strong. Great houses are still selling fast, and bidding wars are still happening for well-kept, nicely furnished properties that have a rental history in desirable communities. Cash buyers coming from out of town, looking for Turnkey STR properties are still very much in demand and commanding the highest premium. There are still good investment opportunities in the Poconos.
Savvy investors still see the Poconos as a place with good potential and unlike other vacation areas, the Poconos presents several fallbacks if their STR strategies fall short. According to the tourist bureau, 47 million people live within 3 hours of the Poconos which makes the area an extended suburb of New Jersey and the Lehigh Valley, and a very extended suburbs of New York City and Philadelphia. With the ability of people to work from home and less congested highways if they need to commute, the Poconos gives investors a strong long-term rental market (LTR) as well as potential price appreciation coming from migrants coming in from the metro areas. In my opinion, home prices in the Poconos will not drop significantly over the next few years.
STR restrictions are growing and more communities face pressure from full-time residents to ban STR when neighborhoods become predominantly residential. Community shifts from vacation getaways to residential neighborhoods will only increase demand for those communities that declare themselves as vacation home communities (as indicated with green lights in my STR-friendly community scorecard). Vacation home communities that build a healthy dependence on guest revenue will stand out. Examples of this are Arrowhead Lake, Big Bass Lake, Boulder Lake Club and Pocono Farms whose nice amenities are significantly supported by guest revenue should prove to be a safe investment. Communities that offer amenities that are attractive will draw good reviews and fuel strong demand. Investors in these communities will be wise to become active in their community association to protect their STR investment.
Running a STR is like running a micro-hotel, you are investing in the hospitality business. As with all businesses, success comes not just from location, but from the quality of the operation, from what I have seen half of the success comes from location, the other half the operation which includes how it is outfitted. Extra bedrooms, outdoor kitchens, decks and patios, game rooms, hot tubs are all improvements that keep guests coming. Professional service keeps the reviews positive and visitors returning.
The Poconos have been a vacation destination for generations, and they will continue to be for generations to come. If you choose to invest here, you will have your challenges, but you will have ample opportunities to succeed. As with all investments, there is risk, so run the numbers before settling on STR investments in the Poconos. I also suggest you always double check with the local municipality and the local community association before making an offer.