Home prices on Long Island’s East End have continued their stomach-churning descent from last year’s record highs, according to a third-quarter market report released today by Prudential Douglas Elliman.
Average sales prices for all homes in the Hamptons and the North Fork tumbled 26.8 percent to $1.32 million in the third quarter, down from $1.8 million in the same period last year, according to the report, which was prepared by real estate appraisal firm Miller Samuel. Median sale prices slid 17.3 percent to $729,000 from $882,000.
Perhaps most striking was the disparity in price changes between the Hamptons, a popular beach vacation spot for Wall Street’s elite, and the winery-laden North Fork, which is becoming more popular with vacationers but is still predominantly a primary residential market.
While the North Fork saw a 10 percent increase in median sales price from the third quarter of 2007, the Hamptons saw jarring price cuts. Average sales prices on the South Fork plummeted 23.3 percent to $1.53 million from $2 million in the prior year quarter. Median sales prices in the Hamptons slipped 19 percent from $1.03 million last year to $830,000.
Meanwhile, the number of sales on the South Fork stalled, dropping 28.8 percent from the third quarter of 2007 and 27 percent from last quarter. As a result, listing inventory jumped 9.8 percent year-on-year.
In part, the precipitous slide in prices is due to 2007’s record high prices in the Hamptons, explained Jonathan Miller, president of Miller-Samuel, who prepared the report.
The median sales price for the East End was 1.6 percent higher than the same period two years ago.
“Our market has shifted and we’ve seen some negative impact because of the financial markets,” said Rick Hoffman, the Corcoran Group’s regional senior vice president for the East End.
The hard economic times are being worsened by a “standoff” between buyers and sellers, Hoffman said. Sellers are reluctant to lower prices so soon after home prices reached astronomical highs, and buyers expect negotiability as the country heads towards recession. As a result, fewer deals are getting done.
Miller said that effect is exacerbated in the very high end of the Hamptons market, where sellers felt very little pressure to unload homes quickly. In the top 10 percent of the East End market, listing inventory increased 45.6 percent year on year from 351 homes to 511, the report said, while listing discount a nearly doubled from 7.5 percent to 13.8 percent year-on-year.
“Luxury sellers are even slower to react to changing conditions than the general market,” Miller said. “Homes are being priced as though the market is still on the rise.”
On the North Fork, by contrast, sales are more often motivated by life decisions, like moving or giving birth.
Dismal as the numbers may be, the worst is far from over. The third quarter numbers don’t reflect Wall Street’s wild swings in October– and the ensuing layoffs and bonuses reductions expected to follow.
“The real extent of the impact will be in the first half of next year,” Miller said. “That’s when the reality of the bonus situation will hit.”