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“Guys on Wall Street would sell the Hamptons house and their art collection before they would take their kids out of a top school,” says one Morgan Stanley banker. “Education is an essential.” The top end of the art market has recovered quickly from the recession, so selling now might not be a bad move.
Funny thing is, I see business picking up in the Hamptons ( albeit, from a horrendous Q4 2011) and am hearing about an uptick in NYC sales too.
So what’s the truth here? Unfortunately, with no dependable date sharing and tracking system in The Hamptons, we can’t know…stay tuned!
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
Oct. 21 (Bloomberg) — Home prices in New York’s Hamptons, the beachside resort towns in Long Island swelled by summering Manhattanites, dropped 14 percent …
The Hamptons Home Sales Down 19% Quarter-over Quarter in Q-3
‘Affordable’ Sales Dominate Hamptons Real Estate
|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 …
|Hamptons Home Prices Fall as Buyers Seek Lower-Priced Retreats
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 …
I first spoke with Oshrat about this piece in April. Since then numerous articles about how “The Hamptons Are Back” have surfaced because sales are up from the dismal 2009 levels.
Keep in mind that sales, in 2009, were down a whopping 75% from 2007 levels, which was the peak of the market coming out of a strong 2006 and sweeping into 2008, despite the first “credit bubble” of fall 2007. So, doubling of 2009 sales still leaves us with sales down 50% from the peak, a steep grade to climb.
I see real estate during this upcoming decade (the 10’s) as being much like the 90’s, where there will be ups and downs, but little meaningful appreciation. There is little to drive enthusiasm and still lots and lots of underwater inventory and “a new reality” that will drag on many for years to come.
Another thing to consider is that, while the median and average sales prices are up, down and all around, while they are appearing to resemble times past, what is different is the homes that represent those figures. Homes that would have sold for $5,000,000 in 2007 are selling for $3,500,000 today. Sure there are exceptions, but that is the rule.
So numbers don’t lie, but those who interpolate them sometimes do…md
By Oshrat Carmiel – Aug 10, 2010 3:18 PM ET
Now’s the time to buy a beachfront home in New York’s wealthy enclave, where prices are down and inventory is up.
George Ross, an energy analyst at First Eagle Investment Management LLC in New York, made a deal in the Hamptons that would have been impossible just a few years ago. He bought a waterfront cottage for less than $1 million.
Ross, a triathlete who swam three-quarters of a mile (1.2 kilometers) around the Statue of Liberty in June, had a vision for the perfect vacation home in the Hamptons, the New York retreat where celebrities mingle with financiers. It had to have what he calls swim-ability. “I go out of my house without crossing the street and go swimming–and I don’t mean in some goofy creek,” Ross, 41, says. “I come out of the water, back on my own property, take an outdoor shower. To me, that sounds pretty great.”
So does the price that the analyst paid for his small but well- maintained wooden cottage in Westhampton Beach. The 640-square- foot (60-square-meter) house sits on a thin coastal strip, with the Atlantic Ocean on one side and Moriches Bay 50 feet (15 meters) away on the other. In February, Ross made an aggressive $830,000 bid for the house, which was listed at $889,000, before settling on $875,000. Three years earlier, the two-bedroom with a wraparound deck sold for $1.24 million.
Buyers have been snapping up vacation homes valued at about $1 million in the Hamptons. As of the second quarter, properties had lost about 24 percent of their value–a steeper decline than in Manhattan–since peaking above an average of $2 million in 2007. Owners who couldn’t sell in the past two years are trying again, keeping the sale inventory high. Some need to sell urgently. Default notices in the east end of Long Island rose 62 percent to 276 in the first quarter, according to Long Island Profiles, a real estate data service. Lenders have even become amenable to short sales, in which they accept less than the balance owed on a property.
“It is still a buyer’s market,” says Jan Robinson, president of Hampton Homes Inc., a broker in East Hampton. “There are some really good deals.”
In his one-year hunt in the Hamptons, Ross used StreetEasy.com and Redfin.com to track price cuts. As he looked for homes that had last changed hands during the peak years in the mid-2000s, Ross was keen to find out if, and by how much, the owners had dropped the price. “If you can identify the value of something in 2004, you can be pretty certain that that would be the value today,” says Michael Daly, founder of brokerage True North Realty Associates in North Haven and author of Hamptons Real Estate Blog.
City dwellers often make the mistake of valuing a waterfront property in the Hamptons much as they would their own apartment- -on a price-per-square-foot basis, says Deirdre DeVita, a broker at Brown Harris Stevens who helped Ross find his home. “That is not at all relevant here,” says DeVita. She says the land value is the most important factor, determining as much as 90 percent of a sale price.
Even rotting docks and seawalls–vestiges of a more permissive waterfront construction era–can add to the worth of the property. In the town of Southampton, which includes Westhampton Beach, docks built from scratch can be no longer than 100 feet, while the presence of an older dock grandfathers in the potential of building a bigger one. Seawalls along a property have been banned, while existing ones, like the 60-foot bulkhead on Ross’s property, can be refurbished. The tough restrictions convinced Ross to drop his idea of buying a fixer-upper and expanding it with a deck or extra bedroom. “Zoning is brutal,” he says. “You can’t do anything without going through huge numbers of hoops.”
Buyers also need to be aware of the presence of illegally installed amenities such as patios when purchasing a home. Local officials may require that the structures be removed before the property changes hands. “I’d see a house and say, ‘Is that deck going to have to come out?’” Ross says. “And they’d say, ‘Yeah.’”
Ross didn’t get everything he wanted, such as a second bathroom, but the cottage has what he desired most: a nearby saltwater workout. “For me, $875,000 is a very fair price for this property,” he says.
Oshrat Carmiel covers residential real estate at Bloomberg News in New York. firstname.lastname@example.org
|The Sag Harbor Express|
Small is the New Big
The Sag Harbor Express
For Corcoran real estate broker Cee Scott Brown, who specializes in homes in the Sag Harbor area, smaller has always been the norm. …
WHO CAN AFFORD BIG ANYMORE?
The real value of mansions now
New York Post
By TAYLOR K. VECSEY and JIM FANELLI From the sign of the times file: Since September, at least 11 tony Hamptons homes — including ones owned by Wall Street …
HEY- PUT YOUR ALARM SYSTEMS ON!
Statistics (and other Damn Lies) Show Hot Hamptons Rental Market
Why, it’s a chart of important, incontrovertible statistics that have convinced us, once and for all, that the Hamptons rental market isn’t just back, …
IN OTHER WORDS, DON’T BELIEVE EVERYTHING YOU READ!
Hundreds hold vigil for stranded whale on Hamptons beach
As hundreds of people watched, a humpback whale calf stranded on an East Hampton beach sprayed water feebly, as its body was pushed by the surf. …
Last Updated Apr 7, 10 6:11 PM 27EAST.COM
Developers of planned senior housing project in Amagansett hope to move past opposition in next round at town planning board
The MTA says there are not enough riders for the East End to upgrade service. The riders say the service stinks, who would want to ride it? Ever try to get to NY or back out East when you really wanted to? It’s challenging, even in summer!
The rail service put in place during the CR 39 construction was deemed “successful” by many. Ridership was up and the number of trains, with proper bus connections were impressive.
Another initiative, the East End Area Shuttle got the green light in 2007 . Where is it hiding?
So, now the MTA is ending non-summer service east of Ronkonkoma on the Greenport line and who knows what’s next?
History leads us to believe it won’t make us smile.
“The children take music, dance and Chinese, and start the day performing either yoga or t’ai chi. But this isn’t a tony private school on the Upper East Side. It is a charter school in the East Village, a neighborhood mostly populated by artsy hipsters and minorities, and most of its 420 students are black or Hispanic and come from poor families.”
From the Hamptons to the inner city, this philanthropist is a role model for the charter school business. see Forbes story here
“It’s a new day for us,” said Randy King, a tribal trustee. “We want to try to become a self-sufficient community.”
see story here
Ok, many of us love the beach. Some of us have enough money to live directly on the beach. But if we do, we have to respect Mother Nature and accept the fact that One Day…
My friend, Billy Mack explains what took place:
“Some places the dunes have eroded to the point that some old foundations are exposed,” said William Mack, a coastal geologist with First Coastal, a coastal development consulting firm in Westhampton. “It was an intense storm. It was a massive amount of wind feeding that massive low just offshore. That generated these extreme wave heights through at least four or five tide cycles.”
Mr. Mack said erosion was focused on specific weak spots, where “erosion waves” have kept the sand barriers from building up. Erosion waves are areas where gaps in offshore sandbars allow larger waves to reach the shoreline. Resulting riptides carry sand away from the beach, accelerating erosion. The erosion hot-spots tend to migrate to the west over many years.”
see the entire story here
Fewer McMansions on the Horizon By June Fletcher, WSJ
Builders Have Little Incentive to Create More McMansions and Hardly Anyone is Buying. There are Deals Out There, But You Better Act Fast.
Real-estate mogul Steven Roth has bought Bernard Madoff’s beach house in Montauk, N.Y., for $9.41 million, nearly 6% more than its asking price.
Hamptons Luxury Homes: One of Country`s First Builders to Become Carbon Neutral
Dalene is the co-founder of the Hamptons Green Alliance (www.hamptonsgreenalliance.org) and the developer of a unique methodology, The International Carbon …
The North Haven property belonging to the advertising executive who did the Michael Jackson Pepsi …
Hamptons real estate is suddenly sunnier
Crain’s New York Business
Home sales in the Hamptons—Long Island’s beach oasis for the rich and famous—are making a comeback. Sales rose 32% during the third quarter from the same …
As predicted, the 3rd quarter number of foreclosure filings (Lis Pendens) on Long Island has already surpassed the record set in the 2nd quarter with 8% of the filing periods still unrecorded.