It may not be immediately obvious that an explosion in home prices will increase campground costs, but that’s because our understanding of this niche real estate market gets channeled by that “camp” prefix. “Camping” means recreating which means getting away from it all, leaving little mental room for other considerations. Yet campgrounds increasingly are a key residential resource, offering affordable housing options to itinerant workers as well as those priced out of more conventional housing. And as the cost of that housing goes up, so does demand for RV sites.
That’s why this week’s release of the latest Case-Shiller index should interest, and concern, anyone who owns or is thinking about buying an RV. The index, widely watched by investors, measures average home prices in major metro areas across the country–and it rose 18.8% over the 12 months ending in December. That’s the highest calendar-year increase ever recorded over the index’s 35-year history. Meanwhile, a separate measure compiled by the Federal Housing Finance Agency, also released this week, found a 17.6% increase in home prices over the same stretch.
As housing prices soar–the median cost of an existing single-family home was $361,700 last quarter–home sales begin to decline and the whole market starts locking up. People unable to buy a home will turn to rental housing, which puts upward pressure on rents but also attracts the attention of commercial real estate investors. Indeed, as reported Jan. 25 by the Wall Street Journal, the most popular commercial property among investors last year was apartment houses because of their perceived ability to keep raising rents. Of course, higher rents keep squeezing out people with low to modest incomes, who then turn to . . . yup, house trailers (a/k/a “manufactured housing”) and RVs, as housing of last resort.
Some of those RVs increasingly are turning up on city streets because their owners can’t afford even the comparatively low rates charged by RV campgrounds–and some wouldn’t be permitted in most RV parks, anyway, because they’re too old and dilapidated. But those who can afford $500 or $600 a month for a long-term site are jostling with more conventional RVers for a spot, and even overnight sites are in greater demand because of this additional influx of “campers.” Campground owners faced with this increased demand, meanwhile, will increase their rates accordingly–sometimes not even deliberately so, thanks to the growing adoption of algorithm-driven “demand pricing.”
In a wider context, therefore, campgrounds are properly seen as just one component of a housing ecosystem; changes in one area can ripple throughout the entire system. That may not have much to do with campgrounds as recreational outlets, but it most definitely will affect their affordability and overall character.