On the North Fork of Long Island, where middle-class New Yorkers could once afford second homes, rising prices and low listing inventory have become about as predictable as the tides. And the story in the higher-priced Hamptons market has been much the same.
Hamptons inventory was down 42 percent year-over-year in the first quarter and 16 percent from the previous quarter, according to a Douglas Elliman report by Miller Samuel. There was only a 5.1-month supply of homes on the market at the end of the quarter, a decrease of 1.7 months from a year ago.
It was the second straight quarter that inventory in the market dropped to a new low. People just aren’t selling.
The low inventory is leading to battles for any home priced within the bounds of reason, or even just outside of them. Despite aggressively high pricing on nearly every listing, one out of every four Hamptons homes sold last quarter involved a bidding war, the third straight quarter that threshold was reached.
Another effect of the lack of supply is that the number of sales is dropping. Hamptons sales have declined annually for the past three quarters, including a 22.4 percent annual drop in the first quarter. Only 395 sales closed in the first quarter, all but 10 for single-family homes.
The median Hamptons sale price rose 7.7 percent year-over-year to $1.4 million. The market share of sales of $5 million or above, meanwhile, was the third highest on record.
A similar story is unfolding on the North Fork. Even with asking prices way up from a year or two ago, even for small and dated houses, bidding wars have been a feature in 40 percent of home sales in two of the past three months.
After nine quarters of annual declines, listing inventory on the North Fork reached its second lowest level ever. The number of available homes in the first quarter was down 27 percent from a year ago to a mere 89 properties. Based on the pace of sales, that was only a 2.3-month supply, which was actually a slight uptick from a year ago.
As was the case elsewhere, declining inventory meant declining sales. There were 114 sales in the first quarter, a 37 percent drop annually. It was the third straight quarter of significant annual declines in North Fork home sales.
The median sale price in the largely agricultural area, a popular spot for second homes, was $848,000, a 13 percent rise from a year earlier. Ten years ago, the median price was $430,000.
When sales volume dipped in recent months, report author Jonathan Miller attributed it to a lack of supply. Experts don’t expect inventory to recover across the country anytime soon, because supply chain issues, rising mortgage rates and other factors.