Have the Hamptons lost their cachet?

TRD New York /
Apr.April 22, 2009 10:43 PM
alternate text“The Real Housewives of New York City” stars Ramona Singer (left) and Kelly Bensimon

“The Real Housewives of New York City” stars Ramona Singer and Kelly Bensimon aren’t the only wealthy Manhattanites putting their Hamptons homes on the market.

Other celebrities reportedly renting or selling their Hamptons homes include Rick and Kathy Hilton, Richard Gere, and Joanne Corzine, the former wife of Gov. Jon Corzine of New Jersey. With foreclosures up and East End homes selling at auction for deep discounts, is the posh enclave at risk of losing its rarified status as a high-end summer destination?

“There is definitely a herd mentality going on,” Judi Desiderio, CEO of Town & Country Real Estate, said of the famous putting their homes on the market. “What happened to the idea of buying when they’re selling and selling when they’re buying?”

Releasing homes onto the market can be seen in the Hamptons overall, where the inventory of homes for sale leaped 15 percent to 1,673 homes in the first quarter of 2009 from the same period last year, according to a Prudential Douglas Elliman market report released today.

Meanwhile, the median sale price sales in the Hamptons sank 23.5 percent in the first quarter of 2009 from the same period last year, and the number of sales plummeted more than 50 percent, according to the report.

The figures illustrate the impact of this fall’s financial meltdown on the East End market, said Jonathan Miller, the president of real estate appraiser Miller Samuel, who prepared the Elliman report.

“This is tangible evidence of what happened in the fall and how it got translated into the housing market,” Miller said.

The numbers bear a freakish similarity to Manhattan’s first quarter market figures, reflecting the area’s longtime status as a beachside region as a playground for New York City’s elite.

In the Hamptons, there were 145 sales in the first quarter, down 53.5 percent from 312 in the prior year quarter. In comparison, Manhattan first quarter sales fell 47.6 percent annually, according to Elliman’s figures. The median sales price in the Hamptons is now $675,000, down 23.5 percent from $882,500 at this time last year; in Manhattan, the price of a resale apartment fell 21 percent from the same period last year.

“There’s tremendous linkage between the South Shore and Manhattan,” Miller said, noting that soaring sale prices in the Hamptons in the past five years were particularly linked to years of fat Wall Street bonuses. “A large portion of the people who own high-end property in the Hamptons also own property in Manhattan.”

He said the drop in sales prices reflects weakness in the high end of the market due to the difficulty of getting jumbo mortgages.

“You had a real shift in the type of units that were sold,” he said. “It makes a compelling argument that the buyers coming into the market now include a heavier mix of first-time buyers and properties under $1 million.”

An example of this phenomenon is social-climbing “Housewife” Bensimon who is asking $10.9 million for her home on Further Lane is East Hampton. Fellow cast member Singer, whose 7,000-square foot Southampton home has figured prominently on the popular reality show, is asking $295,000 to rent it for the summer.

Town & Country’s Desiderio said the Hamptons’ sun, sand and proximity to the city will continue to make it a sought-after summer destination for wealthy New Yorkers.

“It’s been a summer place for the rich and famous for the past 300 years,” she said. “This is just a blip on the radar.”

The barriers to entry in the Hamptons’ most desirable areas are still very high, said Susan Breitenbach, senior vice president in the Corcoran Group’s Bridgehampton office. The only demographic shift she’s noticed is that some buyers who used to rent now have the opportunity to buy.

“We’re not going to have a whole new community of people in the Hamptons that couldn’t afford it before and now they can,” she said. “It’s the same people out here.”

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