Deeds & Don'ts

Following reports that pop music's original Material Girl shelled out $40 million for an Upper East Side townhouse, it's rumored that Madonna is in the market for a piece of the equestrian-friendly Hamptons, as well.  

 

In addition to her penchant for Malawi adoptions, Madonna has been associated with equine adoration since 2005 when, Like a Virgin, she slipped from the saddle and broke three ribs, a hand and a collarbone while riding at her country home outside London. She was a regular at the Winter Equestrian Festival in Wellington, FL, this year, and even managed to snag a private polo lesson from the steamy Nacho Figueras at the nearby International Polo Center. (Don't Cry for Me, Argentina!)

 

In April, she was reportedly thrown from a horse at the Bridgehampton home of photographer Steven Klein (her publicist claims the horse was spooked by a paparazzo-though photos have yet to surface). She was released with minor injuries and will surely live to Die Another Day.

 

Until then, brokers are preparing potential listings. Corcoran's Gary DePersia knows of a few properties on La Isla Bonita that might be ideal for the queen of reinvention, who kicks off her Sticky & Sweet tour in London on July 4. "I think my listing of Morgan Hill Farm in Bridgehampton South would be perfect," says DePersia, ranked fourth broker by sales volume nationwide in 2008 by the Wall Street Journal in its annual Top 200 list of real estate professionals. "It's large-11.5 acres -with room for horses and riding facilities south of the highway on 800 feet of pond-front bordering some 20-plus acres of reserve. It's idyllic, unusual and far from nosey photographers."

 

In East Hampton, near her pals Jessica and Jerry Seinfeld, DePersia suggests an 11-acre plot comprising three contiguous lots.

 

"Again, it would provide the scale and privacy she undoubtedly is looking for, as well as the potential for multiple-family houses."

 

Perhaps she'll invite us all over for the Holiday!

 

Not all agents are as eager to share their suggestions for the Lucky Star.

 

"I think working with celebrities has its drawbacks," says fellow Corcoran broker Diane Saatchi. "One of the important things in the client-broker relationship is anonymity, and when you're working with a celebrity client and the press is all over you, its just uncomfortable. It's just best to keep all of that under the radar."

 

Recalling last summer's rumor that golfer Tiger Woods was doing some Hamptons house hunting-a rumor that turned out to be false-Sotheby's Senior Vice President Harald Grant is not convinced Madonna will seal the deal.

 

"A lot of people say celebrities are looking," he says. "There's a lot of hearsay."

 

True or false, everyone is talking.

 

"I don't think there's been too many people who haven't heard," says Paul Brennan of Prudential Douglas Elliman, adding that Madonna is on the hunt for a horse haven upstate as well as in all parts of the Hamptons. "Steven Klein seems to be the person that she counts on to peruse, look at, suggest (properties). He's always around."

 

Brennan says there are a number of East End properties on the market that would suit the needs of the average member of the horsey set-but it's hard to meet the privacy needs of a global superstar in social Hamptons communities.

 

Judi Desiderio, CEO of Town & Country Real Estate, says she's got a handful of "fabulous properties" that might fit the bill for Madonna. "Tell her to give us a call for a private viewing," she says. "We don't kiss and tell."

 

The New `Fair Market Value'

 

According to Brown Harris Stevens exec Peter Turino, this summer marks the starting point for a new type of Hamptons market characterized by realistic pricing in a buyer's market. Following an average drop of 25 percent, Turino says a new "fair market value" will be established by transactions closing in this calendar year. "The turnaround is going to be a slow, methodical process, but the longterm prognosis is excellent."

 

In the meantime, Town & Country Real Estate CEO Judi Desiderio says her office is already seeing signs of life since the influx of spring. "We bottomed out in February and March, but April's activity levels were a 180-degree turnaround," she says, adding that the first half of summer is ordinarily quiet, picking up in August and running steady through October. "But this year, many of the buyers who have sat on the sidelines for a year or two are ready to make a move.

 

Sophisticated buyers know we are close, if not at the bottom, and with water surrounding the East End, supply is always limited."

 

Progress is still coming in waves, says Andrew Saunders of Saunders & Associates. His eponymous firm saw what he calls a "glitch" of activity in January, followed by nearly two months of silence. Then, beginning mid-March, he took 13 deals to contract in six weeks. "The pocket of strength that we are experiencing right now still needs to be established," he says, wondering: "Are we in a spike of buying that is going to end, or is this a brand new world now?"

 

Either way, Saunders says the overall tenor is more constructive on the part of perspective purchasers.

 

"My sense is that things are turning and that this is not anecdotal. There are a number of data points that suggest that the market is turning."

 

Property Prozac

 

"Consumers are very tired of hearing how bad the market it is," says Robin Kaplan of Prudential Douglas Elliman. While buyers of mid-range properties under $5 million may remain tentative in an uncertain job market, Kaplan says it's business as usual for high-end buyers. "Clearly, we're dealing with an audience that is privileged.

 

They're not going to just sit in their apartments on Park Avenue all summer."

 

Saunders remains hopeful, as well. "The fourth quarter was very challenging," he admits, adding that his firm had the added pressure of being in its infancy, having launched in fall 2008. "People were really tentative after October. There was a lot of hesitation, people walking away from transactions. When the year turned, there was a little more hope in connection with the inauguration and with the new administration."

 

Sotheby's senior vice president Harald Grant, like many in the biz, places much of the bad-mood blame on the media. Still, he says, positive thinking will prevail. "I don't think anybody thinks we're going to have the economic catastrophe the media was projecting," explains Grant. "We're in a secondary luxury marketplace here.

 

It's an area where a lot of people want to be, and there's only so much for sale."

 

Whether the decision to buy is emotional or economic, Corcoran's Susan Breitenbach says the outcome will be the same.

 

"Bear Stearns, Lehman Brothers, Madoff-people were just afraid. But I think they've become used to it," she says. "This is the reality of this year: It's beautiful out today and people are going to come to the Hamptons."

 

Value is the new Location

 

Whether buyers are looking for oceanfront estates or woodland cottages, one constant remains: Everyone wants a deal. And Kaplan of Prudential says buyers are happy to drive an extra 25 minutes to Montauk to get one. "Montauk is very, very relaxed, and prices are typically softer than other parts of the Hamptons," she says. "You can get a four-bedroom oceanfront for $6 million, and you'd have to spend probably $16 million to get that same product in Bridgehampton. And you probably couldn't get it for $20 million in Southampton!"

 

Corcoran's Breitenbach adds a common denominator is "value," no matter the location. "Nobody wants to be silly in this market," she says. "They want to get a good deal even if they have a big budget. Near the beach, on the water-those are always busy, prime real estate. But even a nice property north of the highway, if it's priced well, or is special in some way, it's going to go."

 

DePersia of Corcoran predicts a busy summer across the board as buyers clamor to lock in deals while prices remain negotiable.

 

"This activity will be at all price levels I believe, and not limited to one segment of the marketplace," he emphasizes. "Houses that were unrealistically priced in the height of the market that have made some intermediate price drops and could be perfect for someone seeking good value. There is no one certain type of house or location that this applies to."

 

DePersia, who closed $50 million in sales between November and March, says a number of his buyers actively track various properties and are prepared to pounce on a good deal. "As inventory gets snapped up, especially with less new construction coming on the market, I think prices might stabilize and even turn around. We'll have to wait and see." -A.D.

 

Good Times For Buyers

 

It's time for that almighty pack of Hamptons players to emerge-the vulture investors, the plucky hedge fund guys and the moneyed entrepreneurs-as bargain hunters to savor the moment to own a piece of Hamptons real estate at nearly half price. That would turn an insidious obsession of waiting for a market bottom into an attractive notion that better times are yet ahead.

 

Some East End braggadocios have uncharacteristically become nail-biting namby-pambies swathed in indices of dark doubts over the economy when it would be far wiser to wager that the worst is over.

 

Believe it or not, we are now at the start of a fabulous buying opportunity. We've gone from real estate bubble to bust to bring back the baubles.

 

Discounts Abound

 

Indeed, for the first time in a long time, there are significant discounts on even the best properties.

 

After a 20-year rise you'd think prospects would take advantage of these markdowns. Asking prices are off 20 to 50 percent. And, if we're lucky, a mass of like minds might realize we've hit the underside and it's time to surface.

 

Undeniably, there's hesitation. But repression of an otherwise spendthrift spirit will ultimately bring buyers to the table. For now, the affluent seem to be hoarding cash-or they're looking for it-which explains this periphery of procrastinators.

 

Some bright spots are already in play. Interest rates are low. This has sparked low-end buyers into reacting positively. There's been a lot of activity in properties around and under $1 million; in fact, it's the first time in years that decent houses have been available for less than seven figures.

 

But mortgage money is still tight for mega buyers. They have to cough up at least 50 percent cash applied to purchases of $5 million and up. Trading in securities for big real estate acquisitions is harder from strained portfolios.

 

Some of the most expensive properties have had significant reductions. Tyndall Point, the 55-acre spread in North Haven on Shelter Island Sound, has been reduced from $80 million to $60 million. This is a decent 25 percent off gesture but apparently not yet enough for this desultory wooded waterfront compound.

 

The former Pete Peterson oceanfront spread on Fowler Lane in Southampton is another $60 million offering down from the original $80 million. But even at its lower price it doesn't extirpate excessive pricing.

 

A few other examples are also nods to a softer market.

 

Elie Hirshfeld's Lily Pond Lane oceanfront cottage is down to $25 million from $32 million-still a lot to pay for a house that rests on one acre adjacent to the Georgica Beach parking lot; though with an asking price of $550,000, it has been rented for the summer.

 

Cheryl Gordon's Bridgehampton hills house with its own nine-hole golf course is still skimming the stratosphere at $68 million down from $90 million-after being on the market for half a decade. The new price might elicit an offer. One fortuitous sale occurred on Cedar Street in East Hampton.

 

Apparently, the location was somewhat of a problem for potential buyers. Still with its eight acres and 15,000 square feet of lodging, it managed to win over a confident purchaser unconcerned by a need for public approval.

 

Other timely sales included the Veronis oceanfront house on Meadow Lane in Southampton, which closed at $27 million off its high of $45 million. This was a 15-year-old Shingle-style house of 10,000 square feet with nine bedrooms crammed onto a two acre lot. Another done deal on the ocean was the Tobin house on West End Road in East Hampton, which transferred at $26.5 million down from $40 million. It was always considered a tear down and that's just what happened to it. New owners hired one of New York's up-and-coming architects to build their dream castle.

 

Spec builders have also managed to unload their wares.

 

Namely, several Farrell houses, in East Hampton and Sagaponack, sold in the $8 million-plus range, down from $12 million. Another just went under contract. Farrell delivers it big and bold. Another Sagaponack spec builder not only rented his Parsonage Lane house with an asking price of $595,000 for the season, he also put it under contract reportedly at $10 million, down from $14.9 million. With savings like these, why should anyone fret over whether the market has bottomed or not?

 

The holdouts-stubborn spec sellers who either don't care or have deep pockets-include Jeffrey Colle's Georgica Pond confection- an Elizabethan-style mansion two acres stands at $40 millions a house fit for the concupiscent. Some spec builders, most notably in Sagaponack, continue to assault the market with bilious offerings. Are they out of it or hopelessly arrogant? Generally these weigh in as 8,000-squarefoot houses on unremarkable parcels for $15 million.

 

Smart Move.

 

One of the most compelling buys is a Bridgehampton estate designed by architect Hugh Huddleson on almost four acres with a current asking price of $8,450,000, down from $15 million. Co-listed by venerable brokers John Golden of Prudential and Gary DePersia of Corcoran, they apparently advised their client to get more realistic with a boldly lowered asking price. The strategy is paying off with increased showings and interest. Many sellers feel it's useless to lower the asking price significantly because buyers are out to throttle at any level. Still it's a move in the right direction. All housing markets need to correct before moving up again. That is happening in spades in the Hamptons.

 

Rental Wars

 

As for rentals, it's been a distressed market. Usually active from January through March, rental activity was slow until recently. Some attribute the malaise to an article in one of the New York dailies suggesting that renters should offer 40 percent off the asking price and wait to start their search until the very last minute when homeowners might be hopelessly desperate. That's what many renters did. The problem was that plenty of houses had already been discounted. That left owners with a double whammy: a reduced price subject to even further reductions. Brokers report that it was a tug of war between gutsy renters and bedraggled owners. Ultimately, renters felt they negotiated brilliantly and homeowners were simply relieved to rent.

 

By now, the smart-aleck mentality of some renters has backfired. In late April/early May, there were very few good houses to choose from in the upper price range. That left the latecomers scratching their heads: Where is my summer rental? It went during the first warm weekend in April, stupid. Still hoist by his own petard, one participant snarled earlier in the season," I'll wait until May 15th and get what I want at half the price."

 

He's still waiting.

 

In the past, there have been a few big buyers who have helped stabilize market uncertainty. Sales like Terry Semel's $42 million purchase on Further Lane was an upgrade to the Hamptons image of imperturbability.

 

Now about the only big shot circling our shores is Madonna. Although she's a less reliable indicator. For one, she can't decide whether she wants to live like landed gentry in upstate horse country, or prowl the dunes looking for love in the Hamptons. When she's in the Hamptons, she makes headlines of some sort or another. Earlier in the year she looked at a few  properties, one being a vast oceanfront compound that was not officially for sale but could be at the right price. She was interested in it but, unfortunately, at the wrong price. Stay tuned.

 

Like it or not, we are in a new market. It's significant that bonus money on Wall Street will be scarce for a while and won't find its way to the hallowed corridors of the Hamptons, the Upper East Side or Palm Beach venues.

 

There are still lots of bulging fortunes, liquid and safe, that will eventually come this way. Don't look at the older generation for rescue-they already have their slice of trophy real estate; if anything, they're sellers not buyers. It's the new set of young bucks who have survived the hedge fund meltdown who are ready to spend. They will dominate our market, arriving in their Bentley sedans or Ferrari roadsters. This time, there are bargains to buy. Historically, Hamptons residences have proved to be excellent hedges against inflation, which many believe may be lurking behind our omnipresent hedgerows. -S.D.

 

Pictured Above:

 

An Easy Commute | This charming Amagansett home is in walking distance to the shops, jitney and train. The home theater, heated Gunite pool, outdoor shower and dining patio make summer entertaining easy. Listed for $4,350,000 with Mala Sander of The

Corcoran Group, (631) 899-0108.