Tag Archives: hamptons real estate prices

Hamptons – Greenwich south?

Sales in the Hamptons are moribund, with inventory swelling and prices dropping and buyers staying on the sidelines. I recognize the difference between Greenwich which is mostly a residential community and the Hamptons, a weekend/vacation retreat, but the demographics of the buyers are just about identical and if Wall Streeters aren’t feeling courageous, it hits both markets. From the Bloomberg article linked to, there’s this:

Prospective Hamptons buyers who own Manhattan property are being hit with falling values there, too. Manhattan apartment prices dropped last quarter for the first time since 2002, declining 18.5 percent from a year earlier, according to a July 2 report by Miller Samuel and Prudential.

“Manhattan could very well be a leading indicator” for the Hamptons, Miller said.

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I know the Hamptons aren’t Greenwich

But we share the same buyer pool – really. A surprising number of Greenwich homes are occupied only on weekends and, more important, financial services industry folks buy in Greenwich and Long Island. So news that the number of sales dropped 67% out there in the first quarter is at least somewhat relevant to home sellers here. In fact, I believe the Hamptons did better than we did.

Prices Plummet

The median sales price fell 28 percent from the year earlier to $698,461, Town & Country said. The decline was largely due to fewer sales of $5 million or more.

The total value of all real estate sold in the Hamptons in the first quarter fell 78 percent to $140.2 million.

In Southampton Village, home to the most expensive property sale in 2008 at $60 million, transactions declined 85 percent in the quarter to just three houses. The total value of all homes sold in the village was $2.8 million, a 98 percent decline from the year earlier, when $166.3 million in property changed hands.

In East Hampton Village sales fell 81 percent, also to three houses. The total value of all homes sold there was $4.1 million, a 95 percent decline.

“Those are your iron-clad, been-there-for-over-a-hundred- years, been-used-by-the-Kennedys areas,” said Desiderio. “It’s the blue-chip, best-of-the-best. I would never expect that.”

Nobody expects the Spanish Inquisition.

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He’s late to the party but still gets it

Joe Weisenthal of BusinessInsider.com looks at the NYT’s coverage of Hampton real estate and concludes that there’s trouble. Well, duh. But I do like this observation:

Actually, most telling, is an anecdote about a couple who purchased a home for $1.65 million in 2006, who tried selling it recently for $2.2 million. Nobody bit and they’ve been steadily dropping the price back down to where they’d merely be breakeven. We’re guessing they’ll have to cut further, since there’s no reason to think that inflated 2006 prices are market-rate anymore. But there’s something about the housing mentality that no matter the market conditions, people still think they should make a profit, or at least get their money back.

Once sellers finally give in though, watch out below.

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Hampton Blues

As the Hampton go, so goes Greenwich? Not quite – different markets, vacation vs. year-round – but the buyers are from the same pool. And in the Hamptons, nothing’s selling. Per the NY Times Sunday Real Estate Section.

The Osborne Avenue house hit the real estate market at the end of the summer of 2007, a season that can be said, with the benefit of retrospect, to have marked the sweaty height of a speculative fever. That was the summer that the average cost of a home in the Hamptons shattered the $2 million barrier, the one when Ron Baron, a mutual-fund manager, paid a record $103 million for a 40-acre oceanfront estate. At the time, there were already alarming signs of a downturn in the national housing market, as a crisis took shape in the subprime-mortgage sector and economists predicted a coming onslaught of foreclosures. But that didn’t cause much worry in the Hamptons. The bubble might be bursting off in Sun Belt subdivisions, but not in the playground of the Wall Street elite. Prices were propelled upward by a tautological justification: if you were rich enough to buy in the Hamptons, you were, by definition, a superior judge of the market.

Then came the dreary series of events that we can summarize, as Hamptons people do, by reciting a litany of names: Bear Stearns; Fannie and Freddie; Lehman; Madoff. Since the peak, as one horrific episode after another has unfolded, the area’s real estate market has mirrored Wall Street’s plunging fortunes. Average sale prices have declined by about 10 percent, but that only hints at the seriousness of the trouble, because hardly anything is moving. According to data collected by the Suffolk Research Service, a local real estate data company, the number of sales in 2008 fell by 25 percent in East Hampton, 39 percent in Bridgehampton, 45 percent in Southampton and 47 percent in Montauk. Things really collapsed during the fall. Investment bankers lost their jobs, corporate lawyers saw their client base vaporize and hedge-fund managers went from being hailed as geniuses to being hauled in front of Congressional committees. “Until the market improves or their mental state improves, they’re not buying anything,” says Herb Phillips, a veteran real estate agent who is also chairman of the Southampton town zoning board. “It’s dead.”

It’s a really informative article that you should read in its entirety because it has a lot to say about what’s happening here – for instance, the difficulty in pricing anything when there are no sales to use for comparison. And here’s a profile of a spec builder that could easily be a Greenwich tale:

Catherine Lignelli, a first-time developer, built the mansion, and if she misjudged the market it wasn’t because she misunderstood the newcomers’ appetites. She was from their world. Her husband, Jeff Lignelli, manages a hedge fund, and their primary residence is a 22nd-floor apartment on Central Park South. In January, she met me at the headquarters of Stonebrook Fund Management, her husband’s company, to talk about her entry into Hamptons real estate. Tall and blond, wearing a stylish tweed blazer, knee-high leather boots and a white cashmere scarf, Lignelli showed me into an office that overlooked Park Avenue. She told me that she had gotten into real estate because it was a career that she could pursue while raising her daughter, Alexa, who is not yet 2.

“My focus was quality and aesthetics for family and friends, and seamless entertaining,” she said. “Without sounding feminist, I think that as a mother, as a wife, I can lend a lot to the details of what it takes for effortless, organized living.”

Lignelli has a degree in fashion design.

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Tales from New York

Prices falling, sales falling, inventory up in New York City and the Hamptons.

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Hamptons’ sale prices

A commentator mentioned that prices in the Hamptons have remained steady. I thought I remembered reading the opposite and, while I couldn’t immediately put my finger on that particular article, I did find this blog that says otherwise. 

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