Listings in the Hamptons increased for the fourth straight month, with median prices 19% higher than a year ago
What are those Bob Dylan lyrics? “…And the times they are a-changin’?” After more than two years of explosive growth and tight supply, will the Hamptons real estate market remain strong and immune from the changes that are affecting other US real estate markets?
According to Hamptons Market Data, a market research report, the number of properties for sale in the Hamptons has increased for the fourth month in a row, month over month. August listings increased over July by 8.7%; however, August 2022 listings are still 11.6% less than the number of listings from August 2021. Closings are down too: closings are down by almost 31% in 2022 from 2021, and contracts were down in 2022 by close to 40%.
But pricing…well, that’s pretty much staying the same. While the median price has fallen month over month in 2022, the July 2022 median price is just shy of 19% higher than July 2021. Closing time remained flat in 2022 – but that’s still 10% faster than the rate of closings in 2021. And while it appears that discounts may be back in some (overpriced) price points, bidding wars and/or paying over list price remain constant in the $2 million and below market segment.
Mary Slattery, broker in The Corcoran Group’s Southampton office, sheds more light on the topic. “The Hamptons market, after an incredibly robust two plus years of activity, seems to be ‘leveling out’ due in large part to reduced inventory and buyer fatigue. Buyers are still out there but are not pulling the trigger as fast and are hopeful that more inventory will come on the market in the fall. Prices will remain up as long as inventory is low and that has given buyers pause. Typically, new sales inventory does come on the market after the summer rental season and I think that will hold true for Fall 2022. We are still in a sellers’ market, but buyers are exercising restraint in throwing out offers to secure a home. The under $1 million dollar market in Hampton Bays continues to be on fire!”
Nicole and Zachary Tunick, the wife and husband brokerage duo known as the “Tunick Team” from Douglas Elliman’s Bridgehampton office, report that buyers remain active and that they continue to sell a lot of real estate – the team is not experiencing a “cool down” of the Hamptons market. “Properties which are priced right and done well are moving quickly in most market segments,” comments Nicole. “Listings are going very quickly,” confirms Zachary. “Most are going at ask, and if a listing goes below ask, it’s only fractionally. There’s not a big discount.”
The Corcoran Group’s Tim Davis adds a little more color to the equation. “Location is one of the biggest factors right now,” shares Davis. “During Covid people bought anything they could get their hands on, including in subprime locations. Now that the frenzy has cooled down, buyers are back to focusing on the three basic principles of real estate: location, location, location.”
So, what’s the takeaway here? The era of cheap mortgages is over, and in other US real estate markets rising finance costs are resulting in increased listing supply and reduced pricing. However, it seems like the Hamptons remain immune from the vagaries of these market pressures.
“Interest rates are not affecting the Hamptons’ buyer pool,” confirms Tim Davis. The Tunick Team doubles down on this position, “Pre-Covid pricing is never coming back and the Hamptons’ market is not going to crash. As we see it, the Hamptons real estate market will prove to be recession proof and will continue to rise. Real estate in the Hamptons is an excellent investment and a great place to park money.”
In July 2022, real estate activity in the Hamptons slowed to normal market levels causing some pricing disruption. That said, the $2,495,000 median sold price of Hamptons homes was still 18.8% higher than July 2021. Discounts are back, while over asking price deals remain intact. Twenty six percent of the listings that sold in July 2022 took a discount of 5% or more, while another 26% closed for more than the asking price.
3 Washington Avenue in East Hampton, zoned both residential and commercial, was originally listed for $625,000 in September of 2021 and closed in July 2022 for $400,000, or a 36% discount.
16 Jefferson Street in Sag Harbor was originally listed for $2,695,000 in May 2022 and closed in July 2022 for $2,200,000, or a 18.37% discount.
1100 Meadow Lane in Southampton, the smaller parcel of an oceanfront compound was originally listed in November 2021 for $39,500,000 and closed for $32,500,000, or a 17.72% discount.
50 Hildreth Place in East Hampton was originally listed in May of 2022 for $899,000 and closed for $1,025,823, or 14.11% over the asking price.
21 Winding Way in East Hampton was originally listed in April of 2022 for $1,150,000 and closed for $1,400,000, or 21.74% over the asking price.
332 North Sea Mecox Road in Southampton was originally listed in May 2022 for $1,695,000 and closed for $2,077,000, or 22.54% over the asking price.
Adrianna Nava is the founder of Hamptons Market Data and is a Licensed Real Estate Broker with Compass.