Home sales in the Hamptons, the Long Island beach retreat for summering Manhattanites, jumped to a five-year high as both the priciest mansions and entry-level properties attracted buyers.
There were 539 transactions in the second quarter, up 9.6 percent from a year earlier and the most since the first three months of 2007, when home values in the area were climbing toward their peak, according to a report today by appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. Purchases of properties priced at more than $5 million totaled 38, matching the level at the end of 2010. That was the highest since the firms began tracking the data five years ago.
“In the high end, there’s this sort of herd mentality of one sale leads to another,” Jonathan Miller, president of New York-based Miller Samuel, said in an interview. “You see some high-end sales and it gives people the impetus to list.” Luxury properties are luring buyers as the New York City job market improves and wealthy overseas investors seek havens for cash, according to Miller. The city added 80,000 private- sector jobs in the 12 months through June, the state Department of Labor said last week. About 4,400 of those jobs were at financial companies, whose employees are among the top buyers of Hamptons homes. Mortgage rates at record lows drove deals for the least expensive homes, Miller said.
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(Real Estate for sale in the Hamptons] Purchases of properties costing less than $1 million accounted for 64 percent of all sales in the quarter, dropping the median price 9.3 percent from a year earlier to $850,000, according to Miller Samuel and Prudential.
Priciest Deal
The median for luxury properties in the Hamptons and North Fork, defined as the top 10 percent of all sales by price, jumped 16 percent to $5.13 million. The quarter’s most expensive transaction was the purchase of 43 Surfside Drive in Bridgehampton for $27.3 million, Miller said. The 7,142-square-foot (664-square-meter), nine-bedroom home sits on almost 2 acres (0.8 hectares), according to a listing on real estate website Zillow.com. The inventory of homes available to purchase in the Hamptons climbed 11 percent from a year earlier to 1,798, according to Miller Samuel and Prudential. The absorption rate, or the length of time it would take to sell those homes at the current pace of transactions, is 10 months. The five-year average is 14.4 months.
Active Market
In the luxury market, inventory swelled 55 percent to 321 properties. “The demand is clearly there and the supply is there,” said Gregory Heym, chief economist for brokerage Brown Harris Stevens, which also released a report on the Hamptons today. “The fact that the market is very active is appealing to people.” For Charles Ruoff, the brisk pace of deals allowed him to sell one house in East Hampton and buy another one in Bridgehampton in less than six months. In early 2012, Ruoff sold the two-bedroom home on Three Mile Harbor Road for $850,000, 9.6 percent more than what he paid for it in 2007. Then in May, he purchased a two-family fixer-upper on Halsey Lane in Bridgehampton for $775,000 –18 percent less than what its sellers initially sought. He financed the deal with a 30-year fixed mortgage at about 4.5 percent, and is planning to invest about $150,000 more to install central air conditioning and remodel three bathrooms and two kitchens.
‘Upward Appreciation’
“I saw a lot more upward appreciation and value, long- term,” said Ruoff, 50, who works in Brooklyn as a real estate broker with Brown Harris Stevens. “I’m hoping to hold onto this for a long time.” Sales increased in all six towns surveyed for the Brown Harris report. In Bridgehampton, there were 50 deals in the second quarter, compared with 36 a year earlier. The median price climbed 34 percent to $2.74 million, the brokerage said. Transactions in East Hampton jumped 39 percent, with 97 properties changing hands. The median price declined 17 percent to $808,750, according to Brown Harris. Montauk sales climbed 11 percent, according to a report this month by brokerage Town & Country Real Estate. The combined dollar value of the 20 homes that sold during the quarter increased 46 percent from a year earlier to $27.5 million, while the median price was little changed at $840,000. In Sag Harbor Village, purchases jumped 17 percent to 14 deals, and the median price fell 49 percent from a year earlier to $710,000, Town & Country said.
Source: Bloomberg.