THE BIG NEWS OF THE WEEK: HAMPTON'S LUXURY MARKET TURNS REAL ESTATE ON IT'S HEAD!!!
I am always leery of an article that comes on so strong as several did this past week, talking about the record sales in the high end of the Hamtpons real estate market. We have seen improvements as I have reported in the recent past, but to say that prices are now on the upswing here is a very audacious statement at best--we have had several $5 Million + sales here but that does not mean everything is coming up roses here in this very fragile marketplace.
In fact those few high end sales have distorted the facts and the prices and have made it appear that the "meat and potatos" end of the market is trending up at the moment....In fact, it is NOT trending up. Moderate proces have been affected by the recession more than any other part of this second-home market. I am having a very difficult time to get homeowners to "get real" when it comes to the prices they want to ask.
THE SINGLE MOST IMPORTANT RESULT TO REPORT IS THAT PRICES HAVE FNALLY COME DOWN TO THE RIGHT LEVELS AND AS A RESULT, SALES HAVE CLIMBED BACK TO COMFORTABLE LEVELS!!!
In my efforts to keep the truth at the fore-front of the sales reports (so that sellers do NOT get the wrong idea), I have been successful in getting those prices down to the realistic levels that are needed to keep generating the sales that we have been fortunate to realize in the past 2 quarters, here in The Hamtpons.
BELOW IS THE BLOOMBERG NEWS ARTICLE THAT GENERATED SO MUCH EXCITEMENT THIS PAST WEEK:
"Hamptons Home Prices Climb as Luxury Properties Lure Buyers (1)"
2011-07-21 17:11:43.826 GMT
(Updates with luxury-home seller in 13th paragraph, town sales data in final two paragraphs.)
By Oshrat Carmiel and Ashwin Seshagiri
"July 21 (Bloomberg) -- Home prices in New York's Hamptons, the Long Island resort towns favored by summering Manhattanites, increased 4.2 percent in the second quarter from a year earlier as buyers opted for more expensive beach properties.
The median price of homes that sold in the quarter rose to $937,500 from $900,000 a year earlier, according to a report today by New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. Thirty-nine percent of all sales completed in the Hamptons and Long Island's North Fork were for houses priced at $1 million or more, the second-highest market share for such properties in three years.
"I'd look at the market as stabilized but punctuated with very visible trophy property sales," Jonathan Miller, president of Miller Samuel, said in a telephone interview. "This is a phenomenon we saw in Long Island, Brooklyn, Queens, Manhattan and Westchester. Across the region, the top end of the market outperformed the overall market."
Luxury homes are attracting buyers as Wall Street executives spend bonuses and employment improves, said Judi Desiderio, president of Town & Country Real Estate in the Hamptons. New York City's financial industry showed a net gain of 10,400 jobs in the 12 months through May. The city's overall jobless rate was 8.6 percent that month, unchanged from a 25- month low in April and down 1 percentage point from a year earlier, the state Department of Labor said on June 16.
Above $5 Million
" Twenty-four homes in the Hamptons and North Fork, which constitute Long Island's East End, sold for $5 million or more in the second quarter, compared with 22 a year ago, according to Miller. The median price for luxury properties, defined as the top 10 percent by price, climbed 7.9 percent to $4.4 million.
"They get their bonus and they think, 'hard asset -- let's go buy some East End dirt,'" said Desiderio, referring to the Wall Street payouts that drive the Hamptons real estate market.
"They're finally spending the money."
The most expensive home that sold in the quarter was a 10- bedroom, 12-bathroom house at 1710 Meadow Lane along the Atlantic beachfront in Southampton, which went for $32.5 million, according to Miller and broker listings.
Losing Bids
"The demand for high-end homes thwarted Karen and Bruce Kopelman from buying after they were outbid on two houses in the
$3 million to $5 million range. The couple, who rent a home in the Hamptons full time after selling their house a year ago for
$3.75 million, have been searching for proprieties in Sagaponack or Bridgehampton, south of the primary highway of Route 27.
They most recently lost out on a Bridgehampton home after thinking they were close to a deal, Karen Kopelman said.
"Somebody just outbid us," she said. "I bid less, and they came in right about at asking."
Kopelman, 52, said she has seen a rebound in the market from last year, when her property ended up selling for less than its asking price of $4.45 million.
"There are a lot of homebuyers, because we've had a recession and the market is better now," Kopelman said. "It's definitely better now than it was a year ago."
For Richard Ekstract, it's the best it's been since 2007, when he first tried selling his eight-bedroom Bridgehampton home, before sales and prices began a two-year decline.
Ekstract, 80, the former publisher of Cottages & Gardens magazines, priced his Lockwood Avenue house at $15 million, subsequently reducing it to $9 million before pulling it from the market a year ago.
Surge in 'Action'
" Now Ekstract, seeking a smaller place for him and his wife, has relisted the house at $8.5 million after noticing a resurgence of luxury-property sales.
"We're beginning to see action like we haven't seen in the last three or four years," Ekstract said. "This year, for the first time, we're seeing action in the high end."
Two other reports this month also show increases in Hamptons prices in the second quarter. Town & Country said in a July 15 report that prices climbed 14 percent across the 12 towns and villages that comprise the Hamptons. Brown Harris Stevens, a New York brokerage, said in a report today that the median price of sold homes jumped 18 percent to $1.1 million.
Fifty-one percent of the properties that changed hands were priced at $1 million or more, the first time since the third quarter of 2007 that a majority of Hamptons transactions were above that threshold, said Gregory Heym, chief economist at Terra Holdings LLC, which owns Brown Harris."
Slow Recovery
"The Corcoran Group, which also released a report today, said median prices fell 3 percent to $900,000. Prices for vacant land slid 34 percent to a median of 578,000, as "investors hesitated to speculate," according to the brokerage's report.
"I don't think its booming, I think it's healthy," Dottie Herman, president of Prudential Douglas Elliman, said in an interview. "It's a slow recovery."
In the overall Hamptons market, homes took 44 percent more time to sell in the quarter than they did a year earlier, averaging 188 days on the market, according to Miller Samuel and Prudential. Luxury homes, defined this quarter as properties priced $3.3 million or higher, spent an average of 98 days on the market, 32 percent less time than they did a year ago.
The town with the biggest gain in prices was Southampton Village, where the median price of sold homes jumped 41 percent from a year earlier to $2.99 million, according to Town & Country. The median sales price in the Sag Harbor area climbed
27 percent to $886,250, while fewer properties changed hands.
Sales in the East Hampton area fell 28 percent to 68 deals, while the median price for those transactions increased 18 percent to $955,000."
For Related News and Information:
Top Bloomberg News real estate stories: TOPR <GO> U.S. housing and construction data: HSST <GO> Luxury real estate resources: LXRE <GO> Miller Samuel Manhattan prices: MLH SQFT <INDEX> GP <GO> Personal wealth stories: NI PW CN <GO> New York City unemployment: USCUNEWY <INDEX> GP <GO> U.S. property industry stories: TNI US REL <GO>
--Editors: Kara Wetzel, Daniel Taub
To contact the reporter on this story:
Oshrat Carmiel in New York at +1-212-617-3317 or ocarmiel1@bloomberg.net; Ashwin Seshagiri in New York at +1-212-318-2000 or aseshagiri@bloomberg.net
To contact the editor responsible for this story:
Kara Wetzel at +1-212-617-5735 or
kwetzel@bloomberg.net
NOW, WE HAVE OUR WORK CUT OUT FOR US;....Let's all take a very deep breath and let the facts fall where they may; A handful of sales over $5million does not a "Hot Market" make!!!
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