The Hamptons Boom Continues
By: Marcelle Sussman Fischler
Published: 5/14/2021Source: The New York TimesFeaturing Gary DePersia:
The Hamptons Boom Continues
Home sales and rentals on the East End of Long Island picked up at the beginning of the pandemic and are still going strong.
The high-flying Hamptons real estate market continues to soar.
More than a year after the Covid-19 pandemic began, demand for homes remains robust in the moneyed Hamptons, boosted by a swell of urbanites settling in.
In search of less density and more space, beginning last March, many city dwellers snapped up relatively reasonable off-season rentals in the beachfront towns and manicured villages on the East End of Long Island.
As the pandemic dragged on, many decided to buy a home instead of spending as much as a couple hundred thousand dollars on a summer rental. Enabled by low interest rates and Zoom technology that has made working remotely possible, some enrolled their children in local public and private schools, and helped transform the affluent weekend and summer getaway into a year-round community.
“Our towns are abuzz all week and all weekend,” said Todd Bougard, regional manager for Douglas Elliman Hamptons. “We don’t see any end in sight.”
In the first quarter this year, home sales surged 48 percent compared to last year, according to a report by the appraisal company Miller Samuel for Douglas Elliman Real Estate. The median sales price jumped 31 percent to $1.3 million. Meanwhile, available inventory tumbled more than 40 percent. Bidding wars, with properties trading over the listing price, occurred in nearly a quarter of sales.
“The Hamptons rapidly rebranded itself as a co-primary market instead of a luxury second home market,” said Jonathan Miller, president and chief executive of Miller Samuel. “After the pandemic is brought under control or managed, we still have Zoom. That is a structural change. We have proven during the pandemic that it works. It does enable people to work elsewhere.”
As a result, commutes may be longer but likely won’t be as frequent. “The tether between work and home became longer,” Mr. Miller said. “It is a fascinating reset of the way we live between home and work.”
Record sales activity across the Hamptons “is due to high demand and very low inventory,” said Philip O’Connell, executive managing director of the Hamptons for Brown Harris Stevens. “Buyers are desirous of more space both indoor and outdoor as remote work and schooling continues.”
A blend of remote and in-office work persisting “for the foreseeable future” will allow buyers “to utilize their Hamptons homes substantially more than in prepandemic times,” Mr. O’Connell said. Recent buyers are almost entirely from the metropolitan area and other parts of the country. “As travel opens up, we expect a small percentage of international buyers will re-enter the Hamptons market,” he said.
The shift to a co-primary market is also happening on the North Fork, in the Hudson Valley and upstate Connecticut, Mr. Miller said. (Palm Beach, Florida, and Aspen, Colorado, also enjoyed a sales boon fueled by top brass who often have multiple homes and only need to be at headquarters once a month.)
In the Hamptons, sales of homes priced from $1 to $5 million nearly doubled. While listing inventory for the luxury segment — the highest 10 percent of all sales — rose sharply in contrast to the rest of the market. The loser in the surging market was affordable housing.
“For those who are already struggling to find anything affordable, it has only gotten harder,” said Jay Schneiderman, the supervisor of Southampton Town, counting teachers and nurses among those consigned to a longer commute to get to work in the Hamptons. “The entire work force is priced out.”
Dawn Watson, an agent with the Enzo Morabito Team at Douglas Elliman, agreed. “It’s harder than ever for ‘regular people’ to compete for primary homes — so many all-cash offers, bidding wars,” Ms. Watson said. “If something on the lower end of the market is good and priced right, it’s scooped up — sometimes in a matter of hours.”
The shift to a co-primary market is also happening on the North Fork, in the Hudson Valley and upstate Connecticut, Mr. Miller said. (Palm Beach, Florida, and Aspen, Colorado, also enjoyed a sales boon fueled by top brass who often have multiple homes and only need to be at headquarters once a month.)
In the Hamptons, sales of homes priced from $1 to $5 million nearly doubled. While listing inventory for the luxury segment — the highest 10 percent of all sales — rose sharply in contrast to the rest of the market. The loser in the surging market was affordable housing.
“For those who are already struggling to find anything affordable, it has only gotten harder,” said Jay Schneiderman, the supervisor of Southampton Town, counting teachers and nurses among those consigned to a longer commute to get to work in the Hamptons. “The entire work force is priced out.”
Dawn Watson, an agent with the Enzo Morabito Team at Douglas Elliman, agreed. “It’s harder than ever for ‘regular people’ to compete for primary homes — so many all-cash offers, bidding wars,” Ms. Watson said. “If something on the lower end of the market is good and priced right, it’s scooped up — sometimes in a matter of hours.”
The influx of wealthy buyers who have purchased homes in the $1 million range “are changing the complexion of the area,” Ms. Watson added, including a profusion of tear-downs, gut renovations and increased interest in land buys.
On the upside, revenues from a 2 percent Preservation Tax on Southampton home sales of $250,000 or more is up 40 percent over last year, Mr. Schneiderman said. Funds are used to buy undeveloped land to keep it open, and to buy development rights so farmers can continue to farm. “It has been very successful in terms of preserving our rural character,” he said.
The “silver lining” for owners of more modest homes who might want to cash out and take their windfall elsewhere, Ms. Watson said, is that it is “the time to sell.”
From April to June last year, Greg D’Angelo, a custom builder, leased his rental property — a small house with a pool on a postage stamp-size lot in Sag Harbor — for close to $80,000 to a family escaping the city. “That was our last hurrah,” Mr. D’Angelo said. In January, concerned that the Covid eviction moratorium could make it impossible to evict unsavory renters or squatters, he sold the house for $1.5 million. “It was the market that drove us to sell it,” he said. “I got crazy money for it.”
Though the market usually slows down before Thanksgiving and picks up in February, this year “we went right through the holidays doing deals,” said Gary DePersia, an associate broker with Corcoran. “A lot of inventory that was on the market for years is gone.”
On Shelter Island, a 10,000-square-foot gambrel-style house with a 150-foot dock on Peconic Bay closed for $9.1 million last month after sitting on the market, initially at $10.9 million for two to three years. “That’s a niche market,” Mr. DePersia said. “A rising tide lifts all ships.”
Copyright © 2021 The New York Times Company. Reprinted with Permission. Marcelle Sussman Fischler/The New York Times.