Ellsworth has some of the strongest demand for short-term rentals in the country, due in large part to its status as the gateway to Acadia National Park.
The city has been ranked the second-best place to start an AirBnB or VRBO business in the U.S., according to a new report from AirDNA, a company that tracks vacation rental data. That is a jump from last year, when AirDNA ranked Ellsworth eighth in a similar report.
Driving that higher score in 2024 is the ever-increasing demand for vacation rentals in the Bar Harbor area, where short-term rentals have been cracked down on and regulated since 2021. That has pushed investors into Ellsworth instead, where AirDNA found among the highest possible demand for rentals.
“We have about four or five on our road,” Christopher Jones, an agent with Jones Real Estate in Ellsworth, said. “Its wonderful proximity to Acadia is probably why, and its pricing makes it attractive.”
The prices that Ellsworth commands are offsetting the high home prices in the region. In Bar Harbor, the median home value is nearly $639,000. It is far lower 30 minutes away in Ellsworth, where the median value is $338,000, according to Zillow. That price represents a 9 percent increase from last year, though, a sign that things are heating up in that market too.
Ellsworth is the only place in Maine to make AirDNA’s ranking, which listed the top 25 places in the U.S. to start a vacation rental business. Columbus, Georgia, topped the list. Logan, Ohio, ranked after Ellsworth, and popular vacation spots like Winter Haven, Florida, also ranked highly. Many of the listed places were sought-after destinations because, like Ellsworth, they are close to areas of natural beauty such as national parks and the coast.
There are 709 active short-term rental listings in Ellsworth right now across AirBnB and VRBO, according to AirDNA, almost all of which are entire homes. Jones, the Ellsworth realtor, said that’s part of what makes Ellsworth an attractive vacation spot.
“You can have a whole place here for $200 a night. In Bar Harbor, you get a room. You have to walk through somebody’s kitchen to get someplace,” said Jones, who added that he’s in the process of constructing a short-term rental unit himself that he expects will be profitable.
Because of a high occupancy rate and nightly charge averaging $293, the average Ellsworth short-term rental is expected to bring in annual revenue of about $73,000. That’s a 19 percent increase over last year, AirDNA found.
There may be more restrictions on short-term rentals coming to Ellsworth. Last month, City Planner Matthew Williams said that these types of properties take up a “significant portion” of what could be used as year-round housing stock for Ellsworth residents.
Recently, Ellsworth took coming into compliance with a landmark state housing law as an opportunity to implement some restrictions on the industry. The law, L.D. 2003, could have led to more short-term rentals being built in town as it permits accessory dwelling units to be built on single-family residential lots. The city updated its ordinances so that for the first 10 years after someone builds an accessory dwelling unit, they cannot rent it out for fewer than 28 days.
“It has to be a year-round rental to help with [or] potentially offset some of the housing shortage, and not just encouraging development for a vacation rental,” he said.