Michael Daly

Many have been trying to put on the best face possible about Hamptons Real Estate for the past couple of years;

“Oh, it’s a little slow, but it will come back” or ” I’m busy, aren’t you?”…yeah, right.

Sure, a handful of agents have done well to ok during this economic downturn and, if getting listings is a measure of success, then some are doing great!  But if selling those listings is important (and isn’t it?), then very few are thriving.

Sales are down +50% from the peak and values are down 25-33%, and even as much as 50% on some properties that happened to get caught up in the frenzy of  “The Roaring 00″s”.  Just recently, B of A sent a value statement from an off site appraisal company to a homeowner stating their property in Sag Harbor was valued at $660,000. In November of 2006, that same property was appraised for $1,200,000. How do I know? That homeowner is me.

The realities of The New Reality are staggering.  Many are still in denial about the value of their property. On Long Island as a whole, it appears that about 25% – 1 in 4 – of the listings are priced within 10% of fair market value, which is the same price it was valued at in 2004.  In the Hamptons, that figure appears to be even less.  The rest of the properties just sit and get stale. many of them don’t even get shown because the asking price is so far off the market value no one wants to see it.

The Ebb & Flow of  Hamptons Real Estate

Many of those who had been standing on the sidelines with cash to take advantage of the reduction in values did just that in The Hamptons in late 2009-early 2010 ( flow), but once word got out that sales were brisk, sellers got emboldened and started raising their prices or put their houses on the market for ridiculous prices and buyers backed off (ebb).  The uncertainty around the  economy and the upcoming elections all contribute to the stalemate and the ebb.

Conventional wisdom would say that once the elections are over and there is a clearer picture of what the make-up of the congress will be, that confidence will  start to come back and sales should pick up. Also, word has it that Wall Street Bonuses will be healthy for 2010 and, as they start rolling out in these next few months, that should contribute to brisker sales in Manhattan and The Hamptons as well. That being said, while money is no object to some, many don’t want to be in the position of reaching for a falling knife.

My belief is that Hamptons Real Estate will maintain +or- 5% of 2004 values for the remainder of 2010 & 11, and that we are in for a similar market as the 1990’s when values pretty much held for much of the decade until the banking industry woes worked out and economic and demographic forces came together to create The Roaring 00’s.

That’s not from my crystal ball, that’s from my head and my gut. I threw out my crystal ball in 2008 after it cost me pretty much all I had. Onward and upward…

Some recent articles about The New Reality:

Hamptons Home Prices Fall as Buyers Seek Budget Retreats: Video
Washington Post
Oct. 21 (Bloomberg) — Home prices in New York’s Hamptons, the beachside resort towns in Long Island swelled by summering Manhattanites, dropped 14 percent 

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The Hamptons Home Sales Down 19% Quarter-over Quarter in Q-3
Real Estate Channel
According to the latest Hamptons and North Fork housing market report by New York-basedPrudential Douglas Elliman, sales inventories and price indicators 

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‘Affordable’ Sales Dominate Hamptons Real Estate
New York Magazine
Hamptons real estate has found its footing, though it’s not off to the races just yet. Third-quarter prices are down in many Hamptons locales, but activity 
See all stories on this topic »

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Hamptons Go South
Wall Street Journal
By SHELLY BANJO Even though Hamptons publisher Richard Ekstract dropped the price of his eight-bedroom Bridgehampton mansion to $7.99 million from its 

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Hamptons Home Prices Fall as Buyers Seek Lower-Priced Retreats
Bloomberg
By Oshrat Carmiel – Thu Oct 21 04:00:01 GMT 2010 A for sale sign hangs in front of a property inEast Hampton, New York. Photographer: Jin Lee/Bloomberg 

 

 

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