The Real Deal New York

When the season isn’t over

“Year rounding” in the Hamptons on the rise, brokers say
By Guelda Voien | September 01, 2012 07:00AM

Fashion designer James Fairchild with his two children at the store he recently opened in Southampton. The family moved to the East End from New York City in 2008.

At this time of year, many Hamptons homeowners regretfully close up their summer houses and head back to New York City. But for a growing number of people, that’s no longer the case.

With more school options, an expanding Hamptons economy and technological improvements that allow for telecommuting in many industries, Long Island’s East End has increasingly become a sought-after place to live year-round, real estate experts say.

Brokers say the appeal of the Hamptons — for both New Yorkers ready for a change of pace and buyers from the West Coast and abroad — has widened. At the same time, the once-stark stratification between full-time residents and seasonal visitors has narrowed, they noted.

“I am seeing it morphing into a year-round place,” said Jonathan Miller, CEO of appraisal firm Miller Samuel, which tracks Hamptons sales.

And after a lull during the worst years of the economic downturn, the migration of year-rounders to the East End is intensifying, brokers and builders said.

“The market did slow down for a couple years, and then, about a year and a half ago, people were coming out again and looking at properties,” said Hamptons luxury home-builder Jeffrey Collé (see related story: At the Desk of: Jeffrey Collé).

At a 6,800-square-foot Wainscott home Collé recently completed, which is on the market for $9.99 million, a potential buyer is “in the process of checking out schools,” he said. “They want to move here full-time, and will buy based on where the school is decent for their child.”

 

Turning on the switch

The Hamptons, with its scenic vistas and wide, sandy beaches, has long been a popular summer playground for New Yorkers. But when Collé became a year-round Hamptons resident in the 1970s, the area was still composed of sleepy fishing and farming villages for much of the year.

“When I moved out here, literally, there was nothing,” he recalled. “After Labor Day, there were no traffic lights between Southampton and East Hampton. It was like someone turned [off] a switch.”

He first noticed the high season beginning to expand in the mid-’90s under Clinton-era prosperity, and it’s been slowly growing since. The 2000 census reported that East Hampton had 19,719 residents. By 2010, that number had grown 8.8 percent to 21,457.  In Amagansett, the population grew by around 9.1 percent during that same period, from 1,067 people in 2000 to 1,165 in 2010.

Census data doesn’t specifically track how many residents live in the Hamptons year-round or which use their homes only seasonally. But brokers said that, in the last few years, they’ve seen a significant increase in the number of year-round residents — in part because the Internet has allowed more people to work from home.

Susan Breitenbach, a broker with the Corcoran Group’s Bridgehampton office, said that when she first moved to the Hamptons 33 years ago, economic opportunities were limited.

“Now, anybody can work from their home computer,” she said.

The Hamptons migration has picked up as the recession has receded, Breitenbach added. “In the last two years or so, I’ve seen more and more people” relocating from New York City, she said.

That’s contributed to an overall return to health for the Hamptons real estate market, brokers said, as well as the meteoric rise in prices over the past decade. Miller said average home prices in the East End jumped some 120 percent from $685,476 in the second quarter of 2002 to $1.51 million in the second quarter of this year.

While the Hamptons market did see a slowdown during the financial crisis, Miller noted, it failed to behave like a typical second-home market.

“The Hamptons surprised everybody after Lehman,” Miller said. “[People] thought they’d be hurt substantially more. That didn’t happen — the overall Hamptons market kind of paralleled the city, which suggests that it’s some kind of hybrid of full- and part-time living at this point.”

In the second quarter of this year, East Hampton saw a 150 percent increase in homes sales from the same period of last year, according to data from Corcoran. The median price in East Hampton grew 7 percent to $770,000 during that time as well.

Some brokers said the influx of year-round dwellers may be one reason for the current uptick in the lower end of the East End market. According to a second-quarter market report from Brown Harris Stevens, the number of sales under $1 million increased 42 percent from the same period of last year.

“The lower-end market is very, very hot,” said Collé, who has recently refocused his business on building homes in the $10 million range, as opposed to the $20 million range.

 

School choice

The primary driver of demographic change in the Hamptons has likely been the expansion of educational options in the area, industry experts said.

The Ross School, a private K–12 day and boarding school, helped kick things off in 1991, when it was founded by the late Time Warner baron Steve Ross and his wife Courtney, to educate their daughter, Nicole. Famous alumni of the school, which now has some 570 students, include Alexa Ray Joel, daughter of singer Billy Joel and model Christie Brinkley.

With the opening of Ross, “that’s when people began to feel that they could get a good education out here,” Collé said.

In 1996, another private school opened: the Hayground School in Bridgehampton, founded by the late restaurateur Jeff Salaway. The school’s annual “chef’s dinner” attracts celebrities, like fashion designer Isaac Mizrahi, and considerable cash donations.

In 2002, New York businessman Michael Recanati donated funds to start the Morriss Center, based on the Harvard Project Zero educational think tank’s model. Janet Stork, who teaches education at Harvard, was hired from the Dalton School in New York to run the Morriss Center High School. In 2006, Ross and the Morriss Center merged to form one school for students from pre-nursery through high school.

Some Hamptons public schools have seen a recent uptick in enrollment as well, according to data from the New York State Education Department.

In the Sag Harbor Union Free School District, enrollment jumped from 877 students in the 2008-2009 school year to 957 in 2010-2011, after dropping for several years during the recession. The John M. Marshall Elementary School in East Hampton had 568 students in the 2010-2011 school year, up from 441 in 2008-2009. And at the elementary Amagansett School, there were 102 students in the 2010-2011 school year, up from 89 in 2008-09.

The Amagansett school district is “among the best in the state,” Collé said, noting that the buyers he works with are often interested in living in that district.

In the past, Breitenbach said, school options were one factor that kept wealthy Manhattanites from moving to the Hamptons year-round. “I think the schools were what people were worried about,” she said.

Now that those options have improved, she said, she sees a number of people who work in Manhattan’s financial sector moving out full-time, and either working from home or from satellite offices that are increasingly being set up in the Hamptons.

In 2005, for example, a Victorian house at 225 Windmill Lane in Southampton Village became the first hedge-fund “hotel,” where funds could rent desks with Bloomberg terminals and trading software. Though that office shuttered during the downturn, technology’s continual evolution is letting more and more financial professionals work from the Hamptons.

“We’ve got friends who do equity trading out of their homes,” said fashion designer James Fairchild, who spent two decades as a vice president for design at Ralph Lauren before opening his own store in Southampton this spring. “Lots of investment bankers have the capability of moving out here. They can work anywhere they want to if they have a computer.”

 

Growing industry

Not all full-time East End residents work remotely. As the Hamptons has skyrocketed in popularity as a vacation destination in recent decades, the growing real estate industry and related fields have employed more and more people.

“The business of building and decorating houses goes on year-round,” said Peter Turino, president of Brown Harris Stevens of the Hamptons. “You have builders, decorators, attorneys, mortgage bankers, surveyors — a whole army of people servicing the real estate industry out here.”

Brown Harris Stevens, for example, entered the Hamptons market in 2004 with four offices, and has expanded to seven in the interceding years. The firm now has 175 Hamptons brokers, Turino noted.

Fairchild moved from New York City to the Hamptons full-time in 2008, he said, so his two sons could spend more time outside without him worrying about their safety.

“It’s great for kids with all these outdoor activities,” said Fairchild, whose children now attend public school in Sag Harbor. “In New York City it’s, like, what do you do with them?”

The Hamptons is also changing in other ways that make it appealing as a primary residence. The number of restaurants open year-round has increased, for example: Local favorite Bostwick’s Chowder House in East Hampton recently announced that it would remain open this year at least through Christmas for the first time. It joins hot spots like Southampton’s Red Bar Brasserie and East Hampton Grill, which attract bold-faced names throughout the year.

But mostly, people moving to the Hamptons are looking for a particular country lifestyle.

“It’s a way of life,” said top Hamptons real estate broker Harald Grant. “People want their kids to live out here as opposed to the city life.”