Home prices on the East End of Long Island dropped in the third quarter as high-end homes sales slowed, according to market reports released today by the city’s major real estate firms.
The median sales price in the Hamptons and North Fork sank 10.7 percent to $625,000 in the third quarter from $700,000 in the same period of last year, and fell 19.4 percent from $775,000 in the second quarter, according to a quarterly report from Prudential Douglas Elliman. A report issued by Brown Harris Stevens found that the median price in the Hamptons was $753,750, down 16 percent from the third quarter of 2009.
The Corcoran Group found that the median sales price for the East End was $695,000, down 1 percent from the same period of last year.
Jonathan Miller, the president and CEO of Miller Samuel Real Estate Appraisers and the preparer of the Elliman report, said the “pronounced drop” in prices was the result of fewer high-end sales occurring.
“The high-end market cooled this quarter,” he said.
Still, the trend is not necessarily a sign of the dreaded double-dip. Housing prices are generally flat, he said; the drop in median prices reflects a shift in the kinds of properties sold, not genuine price declines.
“While housing prices on the ground are not falling, there’s been a shift in the mix,” he said. As of yet, “this doesn’t suggest a double dip. That’s a possibility, but it’s not a sure thing.”
There were 11 sales of more than $5 million in the Hamptons and North Fork markets in the third quarter, Miller said, down sharply from 20 in the same quarter of last year and 22 in the second quarter. Meanwhile, high-end homes on the market have slashed their prices.
The reason for the slow-down, Miller said, is uncertainty about the economy, unemployment and Wall Street bonuses.
“There’s been a little bit of a pullback,” he said. “This uncertainty has people taking longer to make decisions.”
The lower end of the market remained active in the third quarter, which somewhat offset the reduction in big-ticket purchases in terms of volume, Miller said. Elliman’s report counted 469 total transactions in the Hamptons and North Fork markets in the third quarter, an increase of 2.2 percent from 459 in the same quarter of last year.
“The bulk of the activity has been under $1 million,” said Cia Comnas, executive managing director of BHS for the Hamptons and North Fork. According to the BHS report, transactions under $1 million made up 67 percent of the total sales in the Hamptons, up from 57 percent in the same quarter of last year.
While the low-end of the market performed better than the high-end, Miller noted that overall activity was still weak.
Over the past decade, the number of quarterly transactions in the region has averaged 689 sales, he said — far higher than the 469 logged in the third quarter. Meanwhile, the median sales price on the East End is down around 31 percent from its peak of $900,000 in 2007, he said.
The lower end of the market was not as sharply impacted by the drop-off in confidence, he said, because properties over $1 million in the coastal area are more likely to be second homes, and thus viewed as discretionary purchases.
Still, “I suspect you will see the impact in the next quarter on the lower end,” he said.
Comnas said today’s buyers are looking for deals, and over-priced properties are not selling.
“The buyers out there are looking for things that are priced well,” she said. “I would advise sellers to price realistically for this market.”