Cozy beach cottages are so 2001.
Over the past decade, East End homes have gotten bigger, more elaborate and more expensive, according to a 10-year market report released today by Prudential Douglas Elliman.
In 2009, the average sales price of a home in the Hamptons was $1.52 million, up 152 percent from $607,014 in 2000. The median sales price jumped 124 percent to $825,000 from $367,250 in 2000, the report shows.
The increase reflects the addition of larger homes to the housing stock, said appraiser Jonathan Miller, president and CEO of Miller Samuel and the preparer of the report.
(For a story on the East End residential market in the fourth quarter, click here.)
“People were seeking larger homes in the country on larger pieces of property, and that became the new image of the Hamptons,” Miller said.
Judi Desiderio, CEO of East End brokerage Town & Country Real Estate, said she began to notice the shift towards larger homes in the Hamptons around eight years ago.
“Ten years ago, they weren’t buying McMansions,” she said. “They were buying a reasonable home, maybe around 3,000 square feet, which they could enjoy with their family and friends. Then all of a sudden, people started to build bigger. Bigger was better.”
As the real estate boom raged, homes started appearing at 5,000, 7,000, and even 10,000 square feet, she said.
“It was as though houses were on steroids,” she recalled.
And they weren’t just bigger: they now came with wine cellars, home theaters, and other luxury amenities.
“Every house had to have all the bells and whistles,” she said.
The demand for larger, pricier homes caused the value of properties at the high end of the market to appreciate more than other homes, Miller said. A decade ago, the median sales price of homes in the top 20 percent of the Hamptons market was $1.2 million, according to the Elliman report. By 2009, that figure had grown 195.8 percent to $3.55 million. By contrast, homes at the bottom 20 percent of the market saw a 113 percent appreciation during that time.
“You saw a lot more growth at the high end of the market,” Miller said.
Much of the shift was driven by Wall Street bankers, lawyers and stock brokers building second homes outside Manhattan, he said, in the midst of the easy credit-days of the housing boom.
“Starting in 2003, you saw a tremendous amount of new development there, like every housing market in the country,” Miller said. “Now more than ever, the two markets, Manhattan and the Hamptons, are more interconnected than they were a decade ago.”
In the recession, however, the demand for oversized homes has begun to recede a bit, with buyers — even wealthy Wall Streeters — more cautious about spending.
“If you were going to spend $8 to $10 million on a house, maybe right now the comfort level is more like $3 million,” Desiderio said. “After [the collapse of] Bear [Stearns] and Lehman [Brothers], people are saying, less is more.”
Desiderio’s firm recently sold a 2,800-square foot ocean-front home in Sagaponack listed at $5.58 million.
Of course, the demand for larger homes hasn’t completely disappeared — her firm also sold an 8,000-square-foot Home On Pauls Lane in Bridgehampton — built in 2007– with a sauna in the basement.
Since 2008, the average sales price of a Hamptons home has fallen 13.2 percent from $1.76 million, the Elliman report says.
The averages sales price in the North Fork in 2009 was $619,471, 104 percent more than $303,326 in 2000.The median price was $454,000, down from $225,000 in 2000.