Wall Street bonus announcements brought especially good tidings to one real estate market: the East End of Long Island. The ritzy vacation spot that serves as a summer playground for Gotham’s rich saw a bump in the month after bonus announcements were made, according to a number of local brokers.
They happily say business has picked up and is expected to get even better.
Diane Saatchi, senior vice president of the Corcoran Group in East Hampton, said, “2006 was a record year for sales over $10 million and $20 million.
“Some of those buyers worked on Wall Street, so I suspect there will be even more sales above $10 million in 2007, in part because of the large bonuses.”
The so-called “blue chip” neighborhoods are where the wealthiest buyers are headed — and where the splashiest sales are being made. As Saatchi explained, the generally accepted pecking order breaks down as follows: East Hampton Village, Southampton Village, Sagaponack, Bridgehampton and Water Mill. The stretch of land from Southampton to the west and East Hampton Village to the east is, as she put it, “the equivalent of Fifth Avenue.”
Joseph Seccafico of Prudential Douglas Elliman in Southampton said he’s heard that a number of Goldman Sachs employees, who received hefty bonuses, have been looking exclusively in Southampton Village, “but only on certain streets.” The most popular stretches of pavement, according to Seccafico, are Meadow Lane, First Neck Lane, South Main and Ox Pasture.
Two high-end properties being handled by Seccafico’s firm on those choice roads have already received offers. An estate on First Neck Lane perched on Lake Agawam that was advertised at $48 million has a bid in, as does a $62 million property on Meadow Lane. (According to a report in the New York Observer, the Agawam mansion, situated on a 10.5-acre parcel, belongs to telecommunications mogul Donald Burns.) Seccafico couldn’t comment on what amount the offers are for; they could be for substantially lower than the sky-high asking prices.
If either property receives the asking amount, it would be a record for the Hamptons, beating the $45 million paid for the Burnt Point estate by pharmaceutical distributor Stewart Rahr, who acquired the 18,000-square-foot property in early 2005. At the time it was the most expensive home purchase in New York State, but that record was shattered last year by the $53 million Harkness Mansion sale.
According to Saatchi, business started picking up in earnest in November. Rentals, in particular, flew off the market. Many of the most sought-after spots — including ocean- and pond-front homes in the blue-chip neighborhoods — are already gone, Saatchi said. One recent listing in Bridgehampton, asking $175,000 for the month of August, was snatched up the same weekend it was listed, she said.
Judi Desiderio, president of Town & Country Real Estate in East Hampton, said December was when business started to really pick up for her. “It was busier than the prior 10 months. Houses sitting on the market for over a year started getting multiple bids.” One area that Desiderio called “white hot” is Sagaponack, where she just sold a 1.4-acre pond-front lot for the full asking price of $3.6 million, with multiple bids coming in.
Sagaponack’s rising status hasn’t gone unnoticed in the national media, either. The town came in at No. 1 in a Forbes list of the country’s most expensive zip codes. The list, which appeared in the magazine’s May 2006 issue, called out 11962 for having a median home sale price the year before of $2,787,500.
George Simpson, president of Suffolk Research Service, said 2006 was off from 2005: “a record year, but the market is still solid.”
According to figures compiled by his company, the median price for real estate on the East End increased from $594,375 for the first nine months of 2005 to $650,000 for the first nine months of 2006.
Simpson’s data indicates that a total of nine properties over $15 million sold in the first 11 months of 2006. That two of those sales took place in November is another sign of the uptick: an estate on Meadow Lane moved for $16.25 million and another on Association Road sold for $18 million. “Barring catastrophe,” Simpson said, “the bonus money on Wall Street should make the market go even higher.”
Michael Daly, of RE/MAX Beach Properties in Southampton, said that while “business is not exactly frenetic as compared with a few years ago,” he thinks the market will see its biggest jumps late in January. “That’s when those who want to be in their new homes by Memorial Day — the start of the summer season — will get down to the business of [buying] their place in the sun.”
Daly added that while the national news on real estate is declaring the market “lukewarm,” there are still bargains to be had in the Hamptons, but not for long.
“Those who are buying mainly for investment should not sit out another season and rent,” Daly said. “I happen to believe the Hamptons are still undervalued compared to other markets such as Sarasota, Naples, Santa Barbara, Malibu, Vail and Turks and Caicos, and that property you pass on today will cost you more next year.”
When asked whether buyers were looking to purchase in other areas on Long Island outside of the blue-chip neighborhoods, Daly said while the North Fork “has been appreciating,” buyers are still fixated on the South Fork. “The allure of the South Fork is the ocean; some of us can’t live without it.”
There’s a lack of oceanfront properties available on the South Fork, aside from a few high-priced options for buyers able to shell out $30 or $40 million.
A $35 million Shelter Island listing, a Brown Harris exclusive, has been on the market since July. Last month, Andy Warhol’s Eothen estate sold for $27 million to J. Crew CEO Millard Drexler, the New York Times reported. The $50 million asking price for the property, which hit the market in 2001, had dropped to $40 million in June.