East End home sales activity surges

By Candace Taylor | July 22, 2010 12:03AM

The real estate market on the Eastern End of Long Island — led by the
Hamptons — is demonstrating a remarkable turnaround, with sales up 90
percent from this time last year, according to a market report released
today by Prudential Douglas Elliman.

“I
don’t think anybody expected the improvement in the market to be as
rapid as it has been,” said appraiser Jonathan Miller, president of
Miller Samuel and the author of the Elliman report. “That says a lot
about the product. The Hamptons is a sought-after location — it wasn’t
just a bubble.”

The number of sales on the East End, which
includes the North and South forks and Shelter Island, leaped to 582 in
the second quarter of 2010, the report says, up from only 307 in the same period last year.

Prices,
while still down roughly 30 percent from the peak in 2007, show
improvement from last year. The average sales price on the East End was
$1.36 million, up 5.9 percent from $1.28 million in the second quarter
of 2010, while the median price, $775,000, was up 14 percent from $680,000 in the prior-year quarter. A report from the Corcoran Group released last week shows a similar bump in prices from last year.

In
the Hamptons — the exclusive beach towns on the South Fork — the
average sales price in the second quarter was $1.518 million, up
marginally from $1.5 million in the same period last year. The median
sales price was $900,000, a jump of nearly 17 percent from the
prior-year quarter. There were 479 sales in the second quarter, up more
than 100 percent from the same period in 2009.

Miller noted that
the price increases are due to improved activity at the high end of the
market, which was largely dormant last year, rather than true price
appreciation.

Overall, “we’re seeing prices generally level off,” he said.

Still, he said, the East End market has improved faster than other markets in the region.

“In many ways, it’s behaving just like other markets, but there’s more of a pronounced improvement,” he said.

In
part because the Hamptons and North Fork are known for a large
percentage of vacation homes, the area experienced a sharp and sudden decrease in sales activity after the Lehman Brothers collapse and subsequent financial crisis. But sales activity has quickly rebounded.

“The
expectation was that because it was a second-home market it would be
hit far worse than Manhattan,” Miller said. “The initial reaction was a
stall in activity, but it was short-lived. We saw a rapid recovery.”

The
reason, he said, likely has to do with “enhanced affordability through
a sharp discount in prices;” once the worst of the crisis had passed,
bargain-hunting buyers jumped at the opportunity to snap up discounted
properties with low mortgage rates.

On the less expensive North
Fork, which is also becoming a popular vacation destination,
improvement was less pronounced. While sales activity jumped 35.5
percent to 103 transactions in the second quarter, up from 76 last
year, the average sales price was $622,674, just below the prior-year
quarter figure of $627,204. The median price fell 7.8 percent to
$415,000.

The greater Long Island market saw sales surge by 49.2
percent, due in large part to the federal homebuyer tax credit, the
report says, but prices were virtually unchanged from the same period
of last year. The median sales price was $360,000 in the second
quarter, while the average sales price was $422,832.

East End
based brokerage Town & Country Real Estate released a market report
yesterday for the Hamptons for the first half of 2010.
The report, based on deals by all firms, shows the strongest
performance in Sag Harbor Village, where 24 homes were sold, up from
seven in the first six months of last year. East Hampton Village saw
the greatest improvement in median home sales price, growing 135
percent to $2.925 million, from $1.24 million in the first half of 2009
in the same period of this year, due to the sales of six homes over $5
million, up from only 1 in 2009.

Have a tip? E-mail Candace Taylor at ct@therealdeal.com.