Hamptons Home Prices Surge as Buyers Return to Luxury

Hamptons Home Prices Surge as Buyers Return to Luxury
Article By: Oshrat Carmiel
Bloomberg Businessweek

April 22 (Bloomberg)-- Home sales in the Hamptons, the New York beach towns swarmed by Wall Street and Hollywood vacationers each summer, more than doubled in the first quarter as buyers seized luxury properties.

Transactions climbed to 396 in the towns on Long Island's East End, the biggest annual jump in seven years of record keeping. A shift toward larger, more expensive homes pushed the median price up 35 percent to $908,500, New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today.

"You had a lot more high-end properties in the mix and that skewed the indicators," Jonathan Miller, president of Miller Samuel, said in an interview. "I'd still characterize the housing prices in general as stable."

Stock market gains, including a 78 percent rebound in the Standard & Poor's 500 index since March, 2009, helped rekindle demand for Hamptons property after the credit crisis. Wall Street bonuses roared back as well, climbing 17 percent last year to $20.3 billion, or $123,850 per employee, according to the state comptroller's office.

"There was no stand-off anymore", said Dottie Herman, president Prudential Douglas Elliman. "The sellers are aware that it's not the market we were in two years ago, and the buyers realize that it's not going to be like Vegas or Florida, where there's a fire sale."

End Game

It's that meeting of the minds that brought Eric Stine's two-year search to a close in March. He and husband Neil Markman started looking for a house priced at about $1 Million around August 2008. They struck a verbal agreement for a Southampton property in early 2009 before the seller demanded $80,000 more, said Stine, 37.

The couple tried again at the end of last year, bidding $999,000 on three different Sag Harbor homes priced from almost $1.3 million to $1.4 million. Within hours, they had counteroffers from all three sellers.

"It was much less stressful as a buyer this time", said Stine, a New York-based senior vice president at educational software company Blackboard Inc. "It really did feel like it was our market."

He and Markman, clients of Town & Country Real Estate, closed March 26 on a furnished, 2,000-square foot, three-bedroom house with a pool and renovated kitchen for $1.1 million.

Overall Hamptons sales for the first quarter are in line with the six-year average, Miller said.

Discount Prices

Sellers shaved an average of 12 percent off their asking prices in the quarter compared with 11 percent in the same period last year. Inventory declined 2 percent to 1,640 homes for sale, a sign unsuccessful sellers may have returned some homes to the market, Miller said.

Luxury sales throughout the Hamptons and Long Island's North Fork climbed to 49 properties, more than double the first quarter a year earlier, Miller Samuel said.

The median luxury price gained 34 percent to $5.48 million. Miller defines the luxury as the top 10 percent of sales, which in the first quarter included properties sold for $3.45 million or more.

The most expensive home sold in the quarter was 500 Ox Pasture Road, a two-parcel residential listing that went for a combined price of about $32 million, according to Miller and StreetEasy.com.

Two other real estate brokers issues Hamptons reports this month. The Corcoran Group, based in Manhattan, said sales more than doubled to 466 while the median price surged 46 percent to $950,000.

Town & Country President Judi Desiderior said the median price across the Hamptons climbed 51 percent to $1.1 million, while the number of properties changing hands more than doubled to 292.

"Some of the markets hit hardest by the recession came back with a bang," she said.

-Editors: Sharon L. Lynch, Rob Urban