Hamptons summer rental season not hot
January 28, 2009 11:15AM By Candace Taylor
Corcoran's Rick Hoffman
Usually, frigid winter days -- like today -- are when smart New Yorkers secure their Hamptons rentals for the summer.
Not so this year. Though it's early in the season, brokers say the number of Hamptons rental transactions so far is way down in the wake of this fall's financial crisis.
Michael Daly, principal broker at True North Realty Associates in North Haven on Long Island's East End, estimated that the number of rental transactions may be down by as much as 80 to 90 percent from last year at this time. Since about 10 percent of homes are rented by this time of year, that could translate to more than 1,000 fewer transactions, since there were roughly 13,000 East End homes on the market last year, according to figures from Town & Country Real Estate.
Daly, who is the author of the Hamptons Real Estate Blog, said he'd done three rentals by this time last year, but hasn't done any so far.
"Rentals are way down and there's very little activity," Daly said.
Still, another factor could be that renters are simply slower to make decisions this year, said Rick Hoffman, the Corcoran Group's regional senior vice president for the East End.
"I think that we're looking at a later market," said Hoffman. The uncertainty in the financial markets and the job market "is causing people to be more hesitant in making commitments early on," he said.
The bellwether will be President's weekend in February, said Judi Desiderio, the CEO of Town & Country Real Estate. After that week, when kids are out of school, about 50 percent of the year's Hamptons rentals generally have been booked, she said.
Asking rents also are down, brokers reported.
James Young, a principal broker at the real estate brokerage Rosehip Partners, said he's noticed that sellers who are renting their homes on the company's Web site, www.hamptonsrentals.com, have begun dropping their asking rents by 10 to 15 percent. The site, founded in July, allows sellers to post and modify their own listings. Today there are 500 listings on his site.
"People are lowering their prices in our system," Young said. "We are starting to see people knocking off 10 percent."
Even if homeowners aren't officially lowering their asking rents, actual rents are often more negotiable, Daly said.
"I'm hearing about more flexibility in their prices," he said.
Brokers attributed the weak rental market to layoffs on Wall Street and general economic malaise.
"Even people with a lot of money are not wanting to part with it," Daly said. "They're concerned about what other financial calamities might happen."
Another reason for the rental slowdown is that many renters seem to be more interested in bargain-hunting than serious shopping. Young said he recently showed a summer rental in Amagansett to a group of Wall Streeters who mentioned that "their intention was to offer significantly less than the asking price." Young tried to dissuade them but they persisted, and the owner rejected the offer, causing the deal to fall through. Another broker at his firm had a similar experience, he said.
Renters are "looking, but they're not pulling the trigger," Young said, adding that while many owners seem willing to negotiate, most haven't yet significantly reduced their prices. "Homeowners aren't motivated to drop their pants, as it were, but that might change."
There are also more rentals available this year, brokers said, thanks to cash-strapped owners and unsold spec homes that are being rented by their builders.
The inventory of available rental listings on the East End has jumped about 10 percent from around 13,000 last year to roughly 15,000, Desiderio said. That figure is troubling because "we don't anticipate 10 percent more demand," she said.
While lower prices and more choices are good news for sun-worshipping New Yorkers, a weak rental season could have severe consequences for the Hamptons real estate market.
"It's the rental market here which has been the saving grace for a lot of homeowners," Daly said. "In the past, if they couldn't sell, they were typically able to rent."
For those teetering on the brink of foreclosure, lower rents -- or not being able to rent out their properties at all -- could be the last straw.
"If this is a very weak rental season, we could see more defaults," Daly said.
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Comments
Anonymous
Because fewer people will be going to the Hamptons this summer it won't be as much fun. This summer, with all of the cheap flights and hotels around the world, it's time to travel. See ya!!
Comment #1 Posted By: Anonymous 01/28/09
Anonymous
10% of people are still overpaying to be with meat-heading, wannabe, D-list partygoers? When is this cheesefest going to stop?
Comment #2 Posted By: Anonymous 01/28/09
Anonymous
Every year, despite good times or bad the People who percieve themselves as experts come out of the woodwork to portend doom and gloom for the rental market here in the Hamptons....They have done this year after year after year---please read any newspaper or rag sheet from the past 10 years and you will find the same "know-it-alls" trying to create havoc in a market that just does not fill their "ill-will" predictions. Just so you know: The Hamptons is a rare and popular place for people, especially those who live in Manhattan, to relieve the pressure of living in an oven of a city in the months of June, July and August. It is not a "hot" spot for jerks who want to ruin the place for everyone else--those are the ones who will run to stay elsewhere, where it is "hot"!!! That is why, when all is said and done, the Hamptons is and will continue to be one of the most relaxing and beautiful places on earth and will continue to attract great numbers of people who WILL rent and who WILL return, year afer year. Take my word for it-they will come!!!
Comment #3 Posted By: Anonymous 01/28/09
Anonymous
Is #3 retarded?
Comment #4 Posted By: Anonymous 01/28/09
Anonymous
No, but #4 is....and I bet you have never spent time here either! You have no idea what you are talking about
Comment #5 Posted By: Anonymous 01/28/09
Anonymous
wasn't it a few years ago that the hamptons are dead and the new hotspot was the catskills? Let's face it ...it's the closest and nicest place to be in the summer. Expensive yes, has some questionable characters yes, filled with Jersey shore retards.....No, Features some of the best beaches In The World.....Yes!
Comment #6 Posted By: Anonymous 01/28/09
Anonymous
#3,#5 and #6 are emotionally unstable due to the fact that they are probably real estate agents. Home and rental prices do not fall in the HAMPTONS! There is no recession in the HAMPTONS! The worlds economy does not affect the HAMPTONS! This will be a record breaking season in the HAMPTONS! CVS in East Hampton is struggling to keep up with the demand for percoset, klonopin, and oxycontin and sales at the liquor stores are up. Popov is leaving Grey Goose and Kettle One in the dust.
Comment #7 Posted By: Anonymous 01/28/09
Anonymous
I agree with #7, all these agents remind me of Kathy Bates characters in Revolutionary Road and Misery.
Comment #8 Posted By: Anonymous 01/28/09
Anonymous
#3 so let me get this right, you’re saying during the 2001 recession, the Hamptons weren’t affected????? Keep telling yourself everything will be okay this summer…
Comment #9 Posted By: Anonymous 01/28/09
Anonymous
Take #3's word for it, and go get ripped off in the Hamptons, probably renting a real estate agent's house. They're just now figuring out that there "may be a problem" in the real estate market, but let's trust them on the rental side- it's all that's left for them. They HAVE to believe that "they will come."
Comment #10 Posted By: Anonymous 01/28/09
Anonymous
Rome will never fall!
Comment #11 Posted By: Anonymous 01/28/09
Anonymous
Comment #10 is correct. I have rented in the Hamptons each Summer since 2002. That season, I found a healty inventory of vacancies literally through Memorial Day - with Landlords more than willing to negotiate. This year I have agents chasing me - a first. The sales market was flat/dead last year, and indeed the year before there were more than a few properties that did not move. This year's rental market will make 2001 look like a picnic at Flying Point. Disposible income is the key to the rental market. There are too many new owners looking to offset their yearly carrying costs because they overleverage their purchases coupled with little disposible income, and fear. Trouble is here - they are way past there "may be a problem". Comment #3 is a media outlet statement for mass consumption.
Comment #12 Posted By: Anonymous 01/28/09
Anonymous
# 3 "That is why, when all is said and done, the Hamptons is and will continue to be one of the most relaxing and beautiful places on earth." You need to get out of your eggshell and see the world.
Comment #13 Posted By: Anonymous 01/29/09
Anonymous
I've been around, and the Hamptons really are among some of the nicer and more relaxing places out there, which you may not know until you do "get out" and compare. That's why I bought a small cottage there and totally fixed it up--you guys wanna rent it? :) If I can't rent it out for anything worth my while, though, I'm just going to get out there myself like I intended to in the first place, rather than leave it to the house-wrecking vultures with big Hamptons ambitions but poco dinero.
Comment #14 Posted By: Anonymous 01/29/09
Anonymous
#14 - classic "talking your book." So tacky - but what do we expect from a fan of the Hamptons. Get out a bit more, the world is a fabulous place.
Comment #15 Posted By: Anonymous 01/29/09
Anonymous
I had lived in Southampton since 1973, when the McMansions and morons with money had not yet ruined the "feel" of the area. The Hamptons in the summer are filled with some of the most rude, ill-mannered, idiots found anywhere on earth. I rarely left my home in the summer, and in winter, I was bored to death. NYC has only have a few weeks of 90+ weather, and since I have wised up and no longer roast my skin on the beach, give me the amenities and culture of the city ANYTIME of year. The drive to and fro the Hamptons is one of the most nerve-wracking experiences one could experience. God forbid one has to shop for food or dine at a local restaurant on a summer week-end! Relaxing? Sure, if one becomes a hermit and stays home. The Hamptons are overrated, and are a perfect example of where money does not equal class, and it never will. Overpriced homes or rentals do not equal prestige, but these fools still do not get it. Have fun at the beach, your cancer specialist will see you in September!
Comment #16 Posted By: Anonymous 01/29/09
Anonymous
No. 15: As I've said: I've been around. In fact, I was born and raised overseas. Get over the fact that someone may like the Hamptons more than what you consider exotic and remote enough. The key is to avoid being around the "morons" No. 16 is talking about, and, of course, apply sunblock. I have more news for both of you: money never equals class. That comes from hard work. Chop-chop, you two.
Comment #17 Posted By: Anonymous 01/29/09
Anonymous
2) Based on traffic trends to the site a steady increase in the number of visitors, rental searches and enquiries over the last 60 days. 3) At least to date, more enquiries for shorter term rentals (one to two weeks) as opposed to MD-LD, July-LD, and even Aug.-LD. 4) Listing edits with price reductions (even at this early stage of the game) 5) No rush on the part of potential tenants to commit even after visiting and finding properties that work for them.
Comment #18 Posted By: Anonymous 01/29/09
Anonymous
While we, as brokers in our own right, would love to paint a rosy picture, there can be no denying the fact that things will be different this year. We have been counseling our listors, since last fall, to prepare for a more competitive environment in 2009, and to be sure to list their properties as widely as possible.
Comment #19 Posted By: Anonymous 01/29/09
Anonymous
You can bash the Hamptons and it's devotees, or you can make a great case for the areas natural beauty, which will always be a draw, but as operators of hamptonsrentals.com here is what we see: 1) A growing willingness on the part of landlords to proactively manage the marketing of their rental properties as evidenced by the growing number of listings on our website.
Comment #20 Posted By: Anonymous 01/29/09
Anonymous
Why are there so many haters out there? It's hard to understand all the anger. The Hamptons is a beautiful spot that has always been in high demand, since the turn of the century, 19th to 20th century that is. If you don't like it or you can't afford it, then so be it. No big deal.
Comment #21 Posted By: Anonymous 01/29/09
Anonymous
Welcome to reality, this is a normal market. Fewer offers, lower offers, and you have to negotiate harder to get the deal done. This being said, deals are still being done. People buy, rent, and sell real estate in every market. If you want to be in the Hamptons this summer you will, if you don't, you won't and I for one won't miss you!
Comment #22 Posted By: Anonymous 01/29/09
Anonymous
Excellant post #22!!! Regarding the anger that we read above: The typical person who can not afford to live or rent in the Hamptons is angry---and it shows when they feel more powerful about the possibility that prices will come down to their budget---however, these are the people that we don't want out here anyway; their bad attitude is exhibited in their everyday lives so they are better off staying away...I can't tell you the number of people who visit here who try to ruin the peace and quiet, the beauty and even the fun!
Comment #23 Posted By: Anonymous 01/30/09
Anonymous
Get over yourselves. All of you.
Comment #24 Posted By: Anonymous 01/30/09
Anonymous
#23, the current market will significantly impact rental and sales pricing, period- the beauty of the Hamptons isn't going to keep it bubble proof, as sellers are discovering in spades. Rather than bite the hand that feeds agents (buyers and renters), they should be courting the new "values" out there and working with what IS, not (as is the tendency out there) what is their fantasy version of life. They sound like idiots.
Comment #25 Posted By: Anonymous 02/02/09
Anonymous
I work on wall street and see first hand the financial devastation caused by this bear market - get ready because you have'nt seen anything yet - as one of my clients told me a year ago - "put on your hard hat because this is going to be a bad one"
Comment #26 Posted By: Anonymous 02/04/09
Anonymous
One thing is certain year after year, this year included: Come July 4th there will be more traffic on Montauk Hwy in Bridgehampton than on any street on the Upper East side of Manhattan. Its inevitable. They will come.
Comment #27 Posted By: Anonymous 02/05/09
Anonymous
I agree with #27--but they will come for 2 week or 1 week rentals
Comment #28 Posted By: Anonymous 02/14/09
OT
Don't know if people will come or not, but anyone who doesn't love the Hamptons a) Hasn't been there, b) Has been there and is jealous they can't spend more time there, or c) is retarded. I have travelled well, and have never been anywhere that relaxes me as readily and thoroughly.
Comment #29 Posted By: OT 02/19/09
Anonymous
This is all pretty disturbing being that I'm a seasonal worker in the spa and restaurant industry. Yea they might come for a week or two....and cook at home...or not get that massage. Its not just the real estate market that will suffer, its everything else as well. Things will be different this summer and we just need to accept that.
Comment #30 Posted By: Anonymous 03/10/09
Anonymous
the hamptons are overrated plain and simple-they cater to illegals and are driving out the middle class that built the very homes they live in...over priced restaurants and rentals to try to be socialite days are thinning quick...there are more houses for sale out there then you can imagine...southampton has turned into a complete joke and east hampton is right behind it
Comment #31 Posted By: Anonymous 08/10/09