Alexandria Fisk and Jahil Maplestone searched for a couple of years before finding a two-bedroom house near the beach and town for $450,000.
An East Hampton contemporary is available for $495,000.
WHEN Jahil Maplestone and Alexandria Fisk began looking for a second home in the Hamptons a couple of years ago, they were quickly discouraged by what their $500,000 budget would buy.
“Everything on the lower end of the scale was either a total teardown, which would make a mortgage impossible, or in an undesirable area,” said Mr. Maplestone, 34, a video editor based in Brooklyn.
They had all but given up the hunt earlier this year when Ms. Fisk, 32, a sales strategy director, found an online listing for a $499,000, two-bedroom house on nearly half an acre in Montauk that had just been reduced. Not only was it in walking distance to the beach and town, the yard abutted nearly 40 acres of protected land, ensuring privacy.
“I had a contractor take a look to make sure I wasn’t missing something because I thought for sure this was too good to be true,” Mr. Maplestone said. The couple bought the house for $450,000, put in a new kitchen and bath, doors and windows, and began using it as a weekend getaway earlier this month. “We definitely feel we got a deal,” Mr. Maplestone said.
Not so long ago, half a million dollars wouldn’t buy half an acre in much of the Hamptons. But now that the market has recalibrated and prices have begun to stabilize, a growing number of modest but more affordable properties are popping up for $500,000 or less, creating opportunities for second-home buyers who were previously priced out.
“It’s slowly begun to come back to where prices are of relative value and people can justify them,” said Joseph De Sane, a senior vice president in Corcoran’s Bridgehampton office. He pointed out some listings he called “top values,” including a four-bedroom renovated Cape for $499,000 on nearly an acre at the edge of East Hampton Village that recently went into contract and a $455,000, move-in-ready three-bedroom with central air-conditioning, hardwood floors throughout and a large deck spanning the full width of the house in North Sea. “We’re seeing a bit more in the way of quality,” he said.
There were 720 homes listed for $500,000 or less in the second quarter of 2012, down slightly from the same period last year, but up 11.8 percent from the second quarter of 2010, according to StreetEasy.com. The median listing price was $385,000, down slightly compared with the second quarter of 2011. Though most homes for less than half a million are small, you can now get slightly more space for your money. The size of a home in that price range increased by 10 percent to 1,102 median square feet in the second quarter of this year compared with the same period in 2010, according to StreetEasy.com.
Sure, more affordable places have long been available in less-sought-after neighborhoods west of the Shinnecock Canal, including the hamlets of Quogue and Hampton Bays. But attractive properties are now available in more coveted locales east of the canal, which cuts across the South Fork at Hampton Bays, demarcating the more exclusive hamlets and villages running from Southampton to Montauk.
Take the well-maintained three-bedroom cottage with a wraparound deck on a shy half-acre a block from Otter Pond, tennis courts and Main Street in Sag Harbor Village, listed by Sotheby’s International for $480,000, recently reduced from $499,000. Or the three-bedroom with an updated kitchen, gas fireplace and large backyard in Southampton Village, listed by Prudential Douglas Elliman at $495,000, down from $549,000 in 2011.
Outside the villages the deals get better, including larger properties with more amenities for less money. Consider a refurbished three-bedroom, two-bath Southampton home with a wood-burning stove, eat-in-kitchen and a new deck near Big Fresh Pond, listed by Corcoran for $420,000. Or a three-bedroom, two-bath contemporary in Clearwater Beach, a private beach community in East Hamptons Springs, with central air conditioning and a heated pool on nearly an acre listed by Corcoran that was reduced by $20,000 to $495,000.
“I’ve been doing this for a long time and properties in these locations for those prices haven’t been available for years and years,” said Diane Saatchi, a senior vice president of Saunders & Associates, which currently has a handful of listings under $500,000 ranging from a $335,000 three-bedroom fixer-upper on a quarter of an acre in East Hampton to a $495,000 ready-to-live-in one-bedroom cottage with a loft-like great room and fireplace in walking distance of East Hampton Village.
Of course, you’re not going to find anything on exclusive Georgica Pond, where the cheapest listing with Sotheby’s is currently a 1,100-square-foot cottage for $3.495 million that recently went into contract. And unless it’s a condo, forget about anything south of Montauk Highway. Anything in a desirable area for $500,000 or less is going to need some TLC if not a major overhaul.
But second-home buyers who are willing to invest a little sweat equity can find solid properties with room to expand or improve on. For that $500,000 sweet spot, “you can get a two-bedroom beach cottage in a decent neighborhood,” said Jennifer Linick, an associate broker with Devlin McNiff Halstead Property, based in East Hampton. “It may not be expertly landscaped. Maybe you’ll have to paint it or fix it up a bit, but you can get a fine house.”
Shaun Grover, a landscape designer from Manhattan, had to temper his expectations after he began looking for a beach house last year that he could both use as a second home and rent out for part of the year.
“I was quickly depressed,” he said. “I had to go back to New York and lick my wounds, then circle back around with my newfound perspective.”
Earlier this year he closed on a three-bedroom contemporary with a pool, on the border of East Hampton and Amagansett, an easy bike ride from the beach. He bought it as a short sale for $480,000 — $85,000 below the asking price. While the house had a great floor plan and features like sliding glass doors that open to the pool, it needed a new kitchen, fresh paint and other work, or as Mr. Grover said, “It needed a friend.” After extending the roofline to add to its curb appeal, gutting the kitchen and repainting, Mr. Grover conceded, “It’s a groovy little place.”
If you’re able to spend a little more, your options quickly expand. For $545,000 you can get an 1865 farmhouse just outside East Hampton Village with four bedrooms on a 1.27-acre parcel. And for $549,000 you can get a pristine two-bedroom cottage in East Hampton Village with a formal walled garden and room to expand.
Such bargains helped jump-start the Hamptons market in the second quarter, while skewing prices lower. Brown Harris Stevens reported a sharp pickup in closings for listings less than $1 million in the second quarter. According to the firm’s East End market report, sales for less than $1 million accounted for 56 percent of all transactions in the Hamptons in the second quarter, up from 49 percent compared with a year ago. The median sales price in that category was $555,000, down from $592,500 in the second quarter of 2011.
In May, Tim Donahue and Jen Walton closed on a cozy two-bedroom bungalow on a quiet street in Lazy Point, Amagansett, that dead-ends at Napeague Bay. They paid $390,000 -- $35,000 less than the listing price of $425,000.
It wasn’t the first place they made an offer on, however. When the couple began looking for a second home in the area in 2009, they were quickly lured into a bidding war for a major fixer-upper in Barnes Hole Landing that ultimately sold for about $800,000.
“It was a very cool layout, but it needed a great deal of work -- insulation, windows, siding,” said Mr. Donohue, a high school English teacher from Manhattan. “It had a pool, but it was full of gick.” In retrospect, he added, “We were happy that didn’t work out.”
Copyright © 2012 The New York Times Company. Reprinted with Permission. Gordon M. Grant/The New York Times.