Fiscal cliff fears in Q4 push Hamptons sales and prices through the roof

Luxury home sales up 85 percent over last winter

New York /
Jan.January 24, 2013 12:01 AM

Sellers fearing capital gains tax increases and the fiscal cliff rushed to close high-end Hamptons sales late last year, leading to dramatic increases in the number of transactions and sale prices in the fourth quarter of 2012, according to reports released today by residential brokerages. The Hamptons experienced the highest average sale price in seven years, “skewed by high-end market strength,” Douglas Elliman’s report said.

In the fourth quarter of 2012, the average sale price increased 34.7 percent year-over-year to $2.13 million from $1.58 million, and 49.4 percent from the previous quarter, the report shows. Overall, the number of sales in the Hamptons climbed 30.3 percent year-over-year, to 529 from 406, Elliman’s report says.

Jonathan Miller, president of the appraiser firm Miller Samuel, who compiled the report, explained that the shift in prices was caused by the increase in sales over $1 million and $5 million in the fourth quarter of 2012.

According to Elliman’s report, average sale prices in the upper 10 percent of the market increased a whopping 85.4 percent from the previous quarter, and 31 percent from the same period the year before, hitting $9.79 million. There were 53 luxury sales in the fourth quarter, up 29.3 percent over the previous year.

Miller, among others, attributed the high number of transactions to sellers’ worries about the fiscal cliff and corresponding tax increases. Even though the fiscal cliff did not ultimately affect housing costs, the general perception was that higher housing prices would be inevitable in 2013, Miller said.

More startlingly, sales of homes priced at $2.5 million and above nearly doubled year-over-year, according to Brown Harris Stevens’ quarterly report, which also attributed the jump to sellers scrambling to close in advance of tax increases tied to the Affordable Care Act and Congress’ earlier budget deal.

A total of almost $806 million worth of residential real estate sold in the fourth quarter of 2012, up 29 percent from $624.63 million in the fourth quarter of 2011, the Corcoran Group’s quarterly report says. The village of East Hampton experienced one of the largest increases in prices, with the average rising 74 percent, to $6.43 million from $3.69 million, compared to the fourth quarter of 2011, the report says.

Due to the large volume of sales in the fourth quarter, the number of transactions in the first half of 2013 will likely be lower than usual, Miller predicted. Many sales were “poached that would have occurred organically in 2013,” he said, adding that in the second half of the year, volume should resume as normal.

However, in terms of prices, “We’re going to see pricing firm, if not some upper pressure,” Miller said. “There’s not a lot of options for buyers.”

Indeed, inventory continued to fall in the Hamptons as sales continued to rise, echoing trends in Manhattan and Brooklyn. Listings dropped 12.2 percent year-over-year, to 1,023 from 1,165, Elliman’s report says.

Paul Brennan, Elliman’s Hamptons regional manager, said that the atmosphere in the Hamptons was “panicky and crazy” in December. Though things have since calmed down, he said, the market remains fairly active.


Related Articles

arrow_forward_ios
The $18 million mansion (Sotheby's International Realty)
Original Devon Colony mansion lists for the first time, asking $18M
Original Devon Colony mansion lists for the first time, asking $18M
George Filopoulos, Lloyd Goldman and Gurney’s Montauk hotel  (Gurney's, Getty)
Metrovest, Lloyd Goldman secure $218M refi on Montauk resort
Metrovest, Lloyd Goldman secure $218M refi on Montauk resort
(Bespoke Real Estate)
Hamptons mansion featured on “Succession” trades for $45M
Hamptons mansion featured on “Succession” trades for $45M
Battle royale over East Hampton Airport rages on
Battle royale over East Hampton Airport rages on
Battle royale over East Hampton Airport rages on
Southampton moves to curb emissions after declaring climate emergency
Southampton moves to curb emissions after declaring climate emergency
Southampton moves to curb emissions after declaring climate emergency
12 Koala Ln, East Hampton, NY and Peloton CEO John Foley (Zillow, LinkedIn)
Peloton CEO John Foley lists East Hampton home for $4.5M
Peloton CEO John Foley lists East Hampton home for $4.5M
Nest Seekers International's JB Andreassi and Michael Fulfree with Peggy Zabakolas of Million Dollar Beach House (Nest Seekers International)
“We weren’t canceled”: Nixed by Netflix, Nest Seekers settles for Discovery+
“We weren’t canceled”: Nixed by Netflix, Nest Seekers settles for Discovery+
Bridgeton Holdings lists its 2 East Hampton hotels
Bridgeton Holdings lists its 2 East Hampton hotels
Bridgeton Holdings lists its 2 East Hampton hotels
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...