A cluster of broader economic concerns have kept buyers from closing deals in the Hamptons.
In the fourth quarter, the Hamptons market saw a 35 percent decline in sales versus a year earlier, according to Douglas Elliman’s latest market report. At the same time, the median sales price held flat at $995,000 as listing inventory surged 81 percent.
“Volatility of financial markets may have dampened the drive to purchase,” said Jonathan Miller, author of the report and CEO of appraisal firm Miller Samuel. “The uncertainty associated with that may have caused buyers to pause.”
Macroeconomic factors including market fluctuations, tax law changes and rising interest rates have all contributed to buyers feel more cautious. That’s particularly true in what is typically a second-home market, like the Hamptons, Miller said. The $5 million-plus market saw a smaller decline in sales than other price segments, boosting its share of deals, Corcoran said in a separate report. The biggest drop in market share was in the $500,000 to $1 million range, the report said.
“Buyers opted for higher-priced inventory,” said Ernest Cervi, Corcoran’s regional senior vice president for the East End. “It’s hard to speculate if it’ll continue, but we certainly hope it will.”
Meanwhile, Long Island overall ended the year on a strong note. Sales ticked up 2.6 percent as the median price also increased 3.9 percent to $431,000, according to the Elliman report. Listing inventory hit a record. The combined factors made for a “contrarian” quarter compared with the other nearby markets, Miller said.
In the single family market, deals rose 3.8 percent while the median price climbed 4.8 percent to $449,000. The tax law concerns are more pronounced for higher priced properties, so it’s likely this market hasn’t been as affected by them, said Ann Conroy, Douglas Elliman’s president of the Long Island division.
“It affects the confidence of the higher end buyer,” she said. “If they don’t feel rich anymore, they’ll be reluctant.”