The summer rental season is already well underway on the East End, and brokers told The Real Deal they’re already seeing a few season-defining trends — perhaps most notably, a shift away from the traditional allure of East Hampton.
Migration to the North Fork
Brokers said that with the Hamptons getting more and more congested, those in search of summer vacation rentals are increasingly headed to the North Fork, which is experiencing a marked uptick in activity this year.
“The North Fork was sleepier, but it has become very brisk,” said Tracy Cronin of Gold Coast Homes. “We’re getting a lot more calls for it, and it’s the biggest growth area.”
A more laid-back atmosphere, similar to what certain areas of the Hamptons were like 20 years ago or so, as well as generally more bucolic, farm-studded terrain are among the reasons most cited for the northern migration. Brokers said Montauk, which has transitioned to a party town for young renters in recent years, is a prime example of what some renters are looking to avoid.
One broker likened the burgeoning North Fork region to Brooklyn when it began to take off: “There’s wineries, great food and cool stores, with artists opening up shops,” said Corcoran’s Sheri Winter Clarry. “It’s become an inspiring area, and I think people have been wanting to check it out for a while.”
Clarry said she also has interest from people who are not ready to give up their Hamptons summer rental but want an off-season rental as well. One such client spent an off-season in the North Fork and has already rebooked the same home for another stay. The area is “really special in the fall,” Clarry said.
Some of the best values for rentals are in East Marion and Orient Point, said Cronin. “They’re exclusive, but not overdeveloped.”
The average seasonal rental — Memorial Day through Labor Day — starts at $40,000 and goes from there, said Clarry. Even though interest is up, rental prices have remained stable.
However, sales prices in the area are rising as more people look to buy. Cronin said homes that a few years ago went for $1 million are now closer to $2 million. But a comparable home in Montauk would go for $5 million, and Clarry said some homes could still be found starting around $400,000, making the North Fork very affordable compared to the Hamptons.
Daniel Gale Sotheby’s International Realty closed the North Fork’s priciest residential sale in February, a 15-acre waterfront property on Nassau Point, for $8.9 million. “The longest stretch of bay beach fetches the highest sales price on the North Fork,” said Daniel Gale’s Carol Syznaka in a statement.
Not quite the Hamptons
Regardless of where on the East End one rents, the prime areas are always those closest to amenities — ideally, within walking distance of the beach — and naturally demand more money. The farther away you get from the beach, the lower the price, and the longer it takes to rent.
Some areas are always going to rent fast — often in January — and at a premium. Paul Brennan, regional manager for the Hamptons for Douglas Elliman, confirmed that Montauk will once again be popular with the younger crowd. He said Amagansett was also popular but is more family-oriented, and added, “Europeans love Sag Harbor, where there’s more of a town center.”
But Fern Karhu of Realty Connect USA has noticed increased demand for areas including Westhampton, Quogue and Hampton Bays. The main reason is their location west of Southampton, where Route 27 is still two lanes in each direction, and traffic doesn’t come to a standstill.
“Unless you take a helicopter in, you have to drive, and the beaches are just as nice in Westhampton as they are in East Hampton,” she said. “And it’s much less congested.”
Gold Coast Homes’ Cronin said the area is popular with the “metro crowd” — middle-aged workers with families from the tri-state area who come out only during the weekends and have to get back during the week. “There’s been a huge uptick from this crowd,” she said.
Though some areas, like Quogue, are still expensive, Karhu said there were bargains to be had in Hampton Bays. In late January, she had a full-season rental in the area for $19,000, a small saltbox house for $25,000 and a home with a pool asking $55,000. This compares to about $65,000 for just the month of August to be on the beach, she said.
A look at online rentals for Southampton and areas farther east shows that prices start at about $200,000 and go up from there for the August-through-Labor Day rental period.
Since so many people bought recently in the area west of the canal, particularly along Dune Road, said Cronin, “there’s now a shortage of properties to sell. But there’s a reasonable amount of inventory to rent, because many [former renters] have become homeowners.”
Another East End summer trend is longer rental times, with tenants asking for an extra week or more at the end of the season so they don’t have to leave with the masses, said brokers. Karhu said some were looking for the extension because they wanted to keep the rental through the Jewish holidays.
There’s also been an uptick in year-round rentals. “There’s always been somewhat of a market, but not like this,” said Corcoran’s Randi Ball, adding that yearly rentals for a five-bedroom home and nice pool can range from $150,000 to $300,000.
These renters often want to test out the market and see how much they’re going to use a property before committing to buying.
Baby boomers who are downsizing and people who already own multiple houses but want to have a presence in the area primarily make up that group.
The inventory for such rentals is low, so Ball has been calling owners who rent out their homes seasonally to ask if they’d be willing to lease their homes for an entire year. She’s also targeted sellers with homes lingering on the market. Those landlords get the benefit of someone living in their house and paying all the utilities, and, she said, “since it hasn’t been selling, they get quick cash and then can relist it the next year.”