New Year, New Optimism
It’s a new year, and Hamptons real estate brokers are feeling hopeful about the market. A boost in transactions in late December and early January show that 2020 may fare better than 2019, which wasn’t exactly a banner year for sales, numbers show.
The median price rose 23% from $1.075 million in the fourth quarter of 2018 to $1.325 million that period last year, but the number of homes sold fell by 44% from 443 to 248, according to a report from Town & Country. Douglas Elliman found that the number of sales in the Hamptons rose 11% to 400 year-over-year, but its median sales price declined 8.9% to $906,250 in the fourth quarter of 2019.
This was the biggest market lag that T&C CEO Judi Desiderio has seen in her 30 years in the industry without a major catalyst, like a stock market crash, she said. But due to consumer uncertainty about politics, climate, international trade wars, and other issues, buyers were simply afraid to invest their savings in luxury items like second homes in the Hamptons, she explained.
That being said, the stock market was healthy in 2019, and finance professionals received sizable bonuses as a result. After sitting on the sidelines for about 18 months, buyers are showing interest in the market again, she said.
“December is one of the slowest months of the year, and yet every T&C office was busy,” she said. “Most buyers feel that we’re at or near the lowest [pricing] level we’re going to see.”
Agents at other firms, including Paul Brennan at Douglas Elliman and Angela Boyer-Stump at Sotheby’s International Realty, agreed that the market is showing signs of a rebound.
“The most interesting part of our market right now is the buyer perception that properties aren’t moving,” Boyer said. “I think it’ll be a big surprise for buyers in the second quarter that some of the properties they wanted aren’t available anymore.”
Brennan is cautiously optimistic. He hopes that the end of 2019 was representative of where the market is headed, but noted that clients often rush to close by the end of the year for tax reasons. “So, the question is, was that a false positive or is it actually indicative of what is going to happen?,” he said.
Buyers who plan to shop for Hamptons homes this season should look now, in the dead of winter, before bidding wars heat up with the weather, Compass broker Antonio Bottero added. Property values are projected to rise west of the Shinnecock Canal in particular. A new water main in Westhampton Beach could send them up as much as 30 percent, he predicted, since the $11.2 million project aims to build infrastructure for a wave of new bars and restaurants.
“It’s going to make this village pop off, especially since it’s only 90 minutes from Manhattan,” he said. “Points west of the canal are undervalued right now, so it’s a really good time to buy here.”
There is still opportunity in the new development market too, added Corcoran agent James Peyton. He suggested 70 Johnny Lane and 435 North Sea Mecox in Southampton, and 119 Newlight Lane in Bridgehampton, specifically.
“The $4 million and up new construction niche has accelerated with multiple negotiations that will be in contract by the time this issue hits newsstands,” Peyton said. “But there are still a handful of really exciting new builds with clean fresh interiors ready for this season.”
HRES: It’s been a buyers market recently, do you see that changing in 2020?
James Peyton: Yes, over the course of this year I expect to see a shift in certain segments of the market. The pace and breadth of sales post-Labor Day last season and through the fourth quarter have seen the market absorb a lot of mid- and high-end inventory. New construction always being sought-after and dwindling in inventory, in conjunction with increasing land values, will slow development over the next two years and put sellers back in the driver’s seat in prime locations.
HRES: What was your favorite sale of 2019?
Angela Boyer-Stump: “Bee Cottage” at 11 Fithian Lane, East Hampton was owned by France Schultz who created a magical setting and published a book about the house. It was later purchased and reimagined by artist Stephanie Clark. At the start of 2019, I was asked to list this storybook cottage for sale. It sold within weeks of coming on the market to a local family that has been in love with the house and street for years. Rarely does an iconic home with such style and character capture everyone’s heart.
HRES: If you were a buyer in the Hamptons this year, where would you look?
Antonio Bottero: If I was a millennial buyer who has not started a family yet, I would buy in the Sag Harbor area. There are still some good fixer-uppers available there and it’s only 18 minutes to Sagg Main Beach. The village is always thriving and has good shopping and dining to choose from. If I was a growing family, I would look in the greater Westhampton Beach area, specifically Remsenburg, which I call the New England of the Hamptons. It’s just a few extra stop signs away from the Village of Westhampton Beach and has beach access, but is also the closest to the city.
HRES: What is the biggest challenge facing the Hamptons market this year?
Judi Desiderio: Extracting listing information. From inside the industry, agents have to research several different databases (such as the MLS and Out East) to provide buyers and sellers with comprehensive information about what’s available, what sold, whatever it is. From the public’s perspective, they go on certain aggregate sites that may or may not have reliable information and they’re not getting accurate, reliable and totally comprehensive data at the flick of a switch.
HRES: : In a recent PropertyShark report, Sagaponack ranked the second-most expensive zip code in the country. Why is that?
Paul Brennan: After being discovered in the 1960s and 70s by many famous writers and artists who immersed themselves into the unique afternoon sunlight and agrarian culture in Sagaponack, in the mid-1990s the titans of Wall Street began to purchase the last remaining potato fields that kissed the ocean dunes. This resulted in the construction of one of the largest houses built in America on 65 oceanfront acres of former farmland (Ira Rennert’s Fair Field Estate). The rest is history. How could you not be the second most expensive zip code in America?