East End sales showed healthy year-over-year growth in the second quarter of the year, with a slight uptick from the second quarter of 2010, and a dramatic increase over the first quarter, second-quarter East End reports released today by Prudential Douglas Elliman and the Corcoran Group show.
Sales were up 6 percent in the second quarter from the same three months last year and 63 percent from the first quarter of 2011, according to the Elliman report, prepared by Miller Samuel. The dramatic increase, Jonathan Miller, president of Miller Samuel, said, is due to misleading figures in the first quarter.
“The first quarter sales were artificially low because there was a mad rush to close before Dec. 31,” he said, referring to the expiration of the tax-free capital gains benefit, which was scheduled for that date. “People closed earlier, poaching closing transactions that would normally have happened in the first quarter” of 2011. Those rushed sales, Miller said, were mostly on the high end, thus, stymieing activity on the luxury end in the first quarter, but boosting such sales in the second quarter.
Luxury sales, the highest 10 percent of all Hamptons and North Fork transactions, jumped 6.9 percent year-over-year and 67.6 percent from the first quarter.
The report’s focus on the high-end as a buoy for the market as a whole echoes a report by Town & Country, covering the first half of 2011, released yesterday. Across the entire East End, the Town & Country report indicates, the number of sales rose for homes prices above $3.5 million and below $500,000 but declined in all price categories in between.
Prices remained relatively stable on the East End as a whole in the second quarter, according to the Elliman report. The average sales price increased 11.3 percent to approximately $1.5 million from approximately $1.36 million in the prior-year quarter and increased 23.3 percent from approximately $1.23 million in the first quarter. Condominium unit sales saw a year-over-year drop. The average sales price of a condo was $577,182, down 3.7 percent from second-quarter 2010, but up 19 percent from first-quarter 2011. Bridgehampton had the highest average sales price at $22.3 million. East Hampton had the lowest average sales price at $4.27 million.
Listing inventory remained steady, increasing 6.3 percent to 2,329 units from 2,190 units at the same time last year.
“We did see sales activity edge higher but inventory grew nearly at an identical pace,” Miller said, a sign of stability. There was no impact from the expiration of the tax credit in 2010, Miller noted, because the East End is primarily a second-home market.
The Corcoran report shows a similar picture for prices in the second quarter, with median and average home prices remaining constant compared to the same period last year. Volume increased by healthy margins in 2011, the report says, as sales activity reflected the typically active second quarter that was commonplace before the downturn.
“Pre-recession, the strongest times were always the second and fourth quarters,” said Rick Hoffmann, senior vice president of Corcoran’s East End office. “We’re seeing a return to a historic seasonality.”
Miller also recognized the return of a clear pattern of seasonality, characterizing sales patterns in the past three to four years as “manic.”
They weren’t so much lacking in seasonality as they were “overlapped by a lot of external forces such as the credit crunch,” he said. Now, they’re making a return to seasonal patterns.
The average sales price in both the Hamptons and North Fork markets was $1.55 million, up 13 percent since last year, according to the Corcoran report.
Southampton posted the most impressive uptick in sales prices, increasing by 118 percent to $4.734 million in the second quarter from $2.17 million last year. That increase may be due to a small number of especially high-end properties selling; the median price only jumped 37 percent.
Only one East End area showed negative growth.
The North Fork residential market, on the north of the island, bucked the general upward trend by experiencing a slight slowdown in sales, a 15 percent decrease in the number of sales in the first half of 2011 compared to last year, the Corcoran report shows. Significant adjustments may be necessary to kick-start the sales of properties that have been languishing in the area, the report indicates.
“North Fork has remained somewhat of a challenge, Hoffmann said, “but at least things are keeping steady.”