The Real Deal New York

So long, summer

High-end Hamptons rentals see early interest, but for shorter stays
By Elaine Pofeldt | June 11, 2018 01:00PM

The Jule Pond Estate, set on 42 acres in Southampton, asked $1.7 million for the summer.

For some, the notion of “summering in the Hamptons” may be a thing of the past.

Although the summer rental season got off to an early start this year, some brokers said they are seeing shorter and shorter stays from many younger vacationers who don’t want to be locked in to just one beachfront locale. And the use of home-sharing sites helps them arrange for just a week or a weekend.

“We’re seeing less and less of the Memorial Day to Labor Day tenants looking for houses,” said Douglas Elliman’s Christopher Stewart, who is based in East Hampton. “It seems to be shorter term, either monthly, or sometimes July, sometimes August, and even two weeks.”

Still, brokers said they had an active spring, especially booking around the U.S. Open Championship at Shinnecock Hills Golf Club in June. And there are still plenty of posh summer pads for last-minute shoppers.

Shorter stays

Part of the reason for vacationers’ shorter trips to the Hamptons has to do with the extended school calendar and other responsibilities at home, brokers said. But another key driver of the mindset is the use of home-sharing sites, which both landlords and renters are becoming more comfortable using.

“Airbnb and HomeAway allow homeowners to manage themselves and allow tenants a little more freedom not to be locked in,” Stewart said.

In early May, Airbnb’s listings included a number of luxury options that might have been available only through a broker a few years ago.

Some were for long-term rentals. A five-bedroom oceanfront home in East Hampton, advertised as being available for the first time online, was listed for $278,320 a month. In Bridgehampton, you could rent a 6,800-square-foot, eight-bedroom house on Kellis Pond for $119,272 a month. In Water Mill, those willing to spend $98,686 for the month of July could rent a six-bedroom, 7,000-square-foot house on the border of a nature preserve.

But others were available for very short-term rentals. For instance, for $4,221 a night, you could rent a four-bedroom, waterfront home in Bridgehampton — if you didn’t want to commit to $71,656 for the month of July.

These types of rentals appeal to a mobile generation of vacationers who don’t want to stay in one place for the whole summer.

“Maybe the younger set of people don’t want to be locked into just the Hamptons,” said Stewart. “From Memorial Day to Labor Day, they want to go to Burning Man, Saint-Tropez or somewhere else.”

Nonetheless, Stewart has found the impact on his business to be relatively minimal. “I’ve done the same amount of rentals I normally do, and the prices have increased on all of them,” he said.

Early start

Although renters’ stays seem to be shorter, agents did notice an earlier start to the season this year.

Broker Maryanne Horwath said that by late April, she had already rented a 12-bedroom home in Bridgehampton for $300,000 for the month of July and another oceanfront property in Southampton, which went for $110,000 for a single week.

It was “a very good rental market early on,” said Horwath, a Douglas Elliman agent based in Southampton. “People were coming out earlier…usually people would wait until May to come out for an August rental.”

Horwath isn’t alone. Many Hamptons brokers who rent the highest-end properties have said the season started a little earlier this year. One big factor was winter weather that extended well into the spring.

“I believe it’s because the winter has been so long and cold, people are thinking about summer, looking forward, and renting for longer periods of time,” said Horwath.

The U.S. Open Championship at Shinnecock Hills Golf Club also gave the rental market a boost, especially when it came to short-term rentals, brokers said. With hotels at capacity, the Town of Southampton amended its rental permit law in December to allow shorter-term rentals than the prior two-week minimum. (The change is not permanent, as the resolution covered just the period from June 8 to June 19, and confined rentals to 14 days or less during this window.)

High, higher, highest

One thing that’s helping with the highest-end rentals in the Hamptons is finite options, according to Cody Vichinsky, the co-founder and principal of Bespoke Real Estate in Water Mill.

In recent years, “there hasn’t been new inventory that has come to market on the very high end,” he said. “It’s become a supply-and-demand ratio with high-end rentals.”

Still, the number of people who can afford these properties is limited. Bespoke rented one property in East Hampton for most of the summer for $1 million, but it’s still showing several others.

Take 700 Meadow Lane in Southampton, which Vichinsky said he believed was the most expensive rental on the market. The asking price was $2.25 million from Memorial Day to Labor Day — or July for $1 million and August for $1.5 million. The nine-bedroom house spans 18,000 square feet on eight acres of property that reach from the ocean to Shinnecock Bay. Among the amenities are a pool, a tennis court and a dock.

Also available was the Jule Pond Estate, for which the asking price is $1.7 million for the summer. It extends over 42 acres in Southampton and is bordered by three ponds. Built for Henry Ford in 1960, it was once the main estate on Fordune, a 235-acre property.

In late April, Douglas Elliman also had a few listings around $2 million for Memorial Day to Labor Day.

“The highest-end rentals always have a customer base,” said Elliman’s Stewart.

This summer, he worked with a regular customer from Europe to find a property in Southampton Village for between $100,000 and $200,000. The original plan was to rent for two to three weeks in August, but now the renters are looking at July.

Stewart also rented an oceanfront home in Amagansett for some of June and all of July for $80,000. The house has no pool, but “they really wanted a house where they could walk out the door and onto the beach.”

High-end rentals just below the highest price range are also moving, brokers said. A lot of properties in the $400,000 to $800,000 range are renting, according to Vichinsky, and these renters are looking for an extended stay.

“We’ve seen very good activity on the higher end of the rental market this year,” he said.

But there’s still plenty of inventory. Stewart said there are 30 or 40 rental listings in the Hamptons where the asking price was above $500,000 for the season, plus more than 100 between $250,000 and $500,000.

“That’s a significant amount of rental listings,” Stewart said.

Goodbye, HREO

One development of which the impact remains to be seen has been the replacement of Hamptons Real Estate Online (HREO) with the new Out East website run by parent Zillow, in February. This is the first season with the new system.

Some say the new system is easier to navigate, but not all brokers are happy about it.

“In general, brokers do not like to use the new Out East website,” Horwath said. “I have had inquiries from the listings I have on the site, and many times the rental prices and periods are not shown correctly.”

A spokesperson for Zillow said that sometimes brokers using the back end of the site see the average listing price for a property rather than the price that consumers would see if they choose specific dates for renting it on the site, and it is possible they might, upon taking a quick glance, think the information was not correct.

For many high-end brokers, sales are more important than rentals, which they facilitate as a service to good clients. The average sale price in the Hamptons was up 15.2 percent year-over-year, to $1,986,986, according to Douglas Elliman’s report for the first quarter of 2018.

“Typically, the rentals on the very high end are a gateway to the ultimate purchase,” said Vichinsky. “People rent while they want to come out and look at things to potentially buy.”