Sales activity on Long Island’s East End spiked dramatically in the first quarter of this year, according to a market report released today by Prudential Douglas Elliman.
There were 486 sales in the Hamptons and North Fork in the first quarter — more than double the number of transactions in the same period of last year. Meanwhile, the average sales price of an East End home leaped 42 percent to $1.57 million, up from $1.1 million in the first quarter of 2009. The median sales price, $800,000, showed a similarly dramatic uptick of 32 percent from the prior-year quarter.
“We had a tremendous surge in sales activity,” said Jonathan Miller, the president and CEO of Miller Samuel, who prepared the report. “It’s more than doubled.”
But the eye-popping price increases are somewhat deceptive, reflecting the return of high-end sales to the market rather than a surge in individual home prices, he said. There were 28 sales above $5 million on the East End in the first quarter, up from only seven in the same period a year earlier.
“We’ve really seen resurgence in higher-end activity,” Miller said. “It had the effect of skewing prices up.”
Despite the jump in aggregate prices, individual homeowners on the East End will likely find that their homes have lost around 30 percent of their value since the peak in 2007, he said.
The average sales price of a home in the tony Hamptons — known primarily as a pricey second-home market for wealthy Manhattanites — was $1.75 million in the first quarter, up 33.5 percent from the same period of 2009. On the North Fork, an increasingly popular spot for vacation homes, the average sales price jumped 36 percent to $749,057 from the prior-year-quarter.
Both areas, which depend on moneyed buyers from Wall Street, saw a severe slowdown in sales after the Lehman Brothers collapse. In the first quarter of 2009, for example, the average price of a home on the East End of Long Island plummeted 36 percent from the prior-year-quarter, while the number of sales plunged 50 percent, according to Elliman’s market reports.
“It was a tough market out there,” said Pamela Liebman, the CEO of the Corcoran Group. “What happened in the Hamptons is that sellers held on rather than break price, which really drove down the deal volume.”
Now, she said, “the market has come back.” In March, she said, Corcoran saw its East End transactions soar 400 percent from the same month of 2009.
The area “had the biggest drop-off in volume, and now it’s having the biggest resurgence,” Liebman said.
Activity on the high end of the market has returned as wealthy buyers feel more confident about the economy, agents said.
John Healey, an agent in the Bridgehampton office of Town & Country Real Estate, recently listed a 7-bedroom, oceanfront house at 137 Crestview in Sagaponack for $26.75 million. Since the property went on the market about a month ago — a traditionally busy time of year for the Hamptons — “we’ve had a good amount of showings,” he said. “It’s been very active.”
That’s a big difference from last year, when “the market was terrible,” he said.
Many of the very high-end buyers currently in the market plan to use all cash, he said, so the continuing credit crunch isn’t an impediment.
Buyers are also attracted to lower prices.
“You have had a sharp contraction in prices, and affordability on the East End has changed considerably,” Miller said. “You’re now having people who are being drawn in by the fact that they can get more for their money.”
But despite the increase in sales activity, inventory on the East End grew 1.3 percent in the first quarter. That indicates that sellers who took their homes off the market last year are putting them back on, Miller said.
“Rising inventory could be a concern going forward,” he said.