The Real Deal New York

Aspirational prices abound in the Hamptons while high-end inventory hits 7-year high

Market uncertainty is putting a damper on sales
By Meenal Vamburkar | October 25, 2018 08:00AM

(Credit: Douglas Elliman and Tomás Fano via Flickr)

The Hamptons market is grappling with uncertainty.

Prices are up — but homes aren’t selling, according to Douglas Elliman’s latest market report. The median sales price in the third quarter climbed 8.4 percent year over year to $965,000. At the same time, the number of sales dipped 13.3 percent.

“There’s a lot of aspirational pricing remaining in the Hamptons, and we’re not seeing the same level in other high-end markets,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report. “I think there’s a while to go before sellers in the market get with the program.”

The sub-$1 million market saw an especially pronounced drop in sales, falling 21.5 percent, Miller said. That’s partly a result of rising interest rates, which increase borrowing costs, and uncertainty about how the implications of the new tax law will play out.

On the high end, meanwhile, inventory is piling up — surging to the highest level since in the seven years that Miller has been tracking the metric, he said. The median sales price for luxury properties dipped 3 percent, while the number of sales fell 13.5 percent.

In a separate report, the Corcoran Group also noted that properties below $1 million lost market share. One issue for buyers at that price point is lack of inventory, said Ernest Cervi, Corcoran’s regional senior vice president for the East End. Volatile financial markets and the upcoming midterm elections add to buyer uncertainty, Cervi said — but, in a rising rate environment, it’s better to buy sooner than later.

“There are buyers that are getting ready to strike because of increasing interest rates,” he said. “There will be a good amount of buyer activity, but it’s hard to say what it’ll be compared to last year.”