With interest rates still low for now and the economy recovering, residential real estate firms on the East End of Long Island are seeing a growth spurt.
The market for second homes struggled for several years after the 2008 financial crisis, and the vacation communities on the East End along with it. Now, however, East End real estate firms are adding to their agent ranks, opening new offices and expanding into uncharted territory.
This year, the 10 largest firms in the Hamptons, Shelter Island and the North Fork collectively had a total of 1,277 agents — up 4 percent from 1,230 agents at this time in 2012, according to The Real Deal’s annual ranking of the biggest East End firms. Six out of the 10 largest brokerages in the region have grown in size this past year, according to TRD’s ranking, which is compiled based on the number of agents listed on the brokerages’ websites.
Firm heads said they took advantage of the slow market over the past few years to plan for the recovery, and are now expanding their market share.
“It was easier to grow in a bad market,” said Judi Desiderio, who founded Town & Country Real Estate in 2007. With 130 agents and eight offices on the East End, the firm this year climbed to No. 3 in TRD’s rankings from No. 4 last year.
“In a bad market, you can negotiate [for] space better,” she said. “Brokers are hungry for something different, because they’re not making money and they’re stalled, so recruiting is easier.”
But now that the market has improved, “all of our brokers are making money,” Desiderio said.
Douglas Elliman ranked as the No. 1 firm by number of agents, dislodging the Corcoran Group from the top spot. While Corcoran’s numbers shrank slightly from 327 last year to 325, Elliman grew 3 percent from 326 to 337 agents.
Paul Brennan, Elliman’s Hamptons regional manager and a top broker at the firm, said the company has hired a number of new agents in the past year, and he’s “hoping that there are a few new stars in that lineup.”
With fellow Elliman brokers Michaela Keszler, Victoria Logvinsky and Oren Alexander, Brennan is marketing Elliman’s current priciest Hamptons listing: an estate at 315 Rose Hill Road in Water Mill asking $58.8 million.
The eight-bedroom, 11-bath home includes eight fireplaces and sits on more than four acres.
Saunders & Associates, Sotheby’s International Realty and Halstead Property have also seen significant growth in the Hamptons over the past year, as they made moves to open new offices and cover new territory. For example, five-year-old Saunders, ranked No. 5 with 104 agents, expanded to Shelter Island this year, and is in the process of building a third office in East Hampton.
Other firms said they view this as a time to reassess their strategy or discard unproductive agents. Brown Harris Stevens, which ranked No. 3 in 2012, this year fell to No. 4. The firm saw its agent count drop 5 percent from 132 to 125, according to Aspasia Comnas, an executive managing director of Brown Harris Stevens of the Hamptons.
North Fork–based Albertson Realty and Daniel Gale Sotheby’s also saw their totals slip from last year.
Further Lane Farm in East Hampton is listed for $44.9 million with Town & Country.
Gaining Traction
The Hamptons real estate market is in the process of a significant rebound. According to an Elliman market report, the number of sales in the Hamptons shot up 20.9 percent to 347 in the first quarter, up from 287 in the same period of 2012.
Yet closed sales prices haven’t yet seen a corresponding uptick, though brokers said they are now starting to see prices climbing for homes in contract. The median Hamptons closed sales price fell by 5.1 percent year-over-year to $740,000 from $780,000, according to Elliman’s report.
“We’re getting to a better place: Prices are going up, inventory’s going down, interest rates are going up,” Desiderio said. “The indicators are all saying, ‘start buying real estate.’”
Several Hamptons firms are taking advantage of that to expand their East End market share. Town & Country, for example, in the past year opened a second East Hampton office and expanded its Southampton outpost. The firm is also looking to expand its activity in Sag Harbor, which Desiderio described as the “missing link” in the firm’s coverage area.
“Our business model is that we really want to make sure that in everything east of the Moriches, that Town & Country is the major player,” Desiderio said.
The agency’s priciest listing right now is Further Lane Farm, a 10-bedroom home at 249 Further Lane in East Hampton, listed for $44.9 million.
Town & Country isn’t the only East End firm looking to grow its market share. Saunders recently acquired land at 26 Montauk Highway in East Hampton to build a 6,000-square-foot office, slated to open in the first quarter of 2014, firm founder Andrew Saunders said. The firm has existing offices in Bridgehampton and Southampton.
The company owns rather than rents all its offices, which he said is an integral part of its business model.
“Our model is different,” Saunders said. “Most firms, I think, rent their offices. We’ve put significant resources behind making our offices beautiful and elegant and welcoming to our agents.”
The firm also recently moved into the Shelter Island market, hiring Shelter Island specialist Penelope Moore away from Corcoran to spearhead the effort, Saunders said.
“Shelter Island affords a really beautiful experience at a lower price,” Saunders said. “Our thesis is that if properly promoted and branded, many of these great properties on Shelter Island will find buyers who wanted to be in places like Bridgehampton and Sagaponack.”
Sotheby’s, meanwhile, came in at No. 6 on the list, growing from 87 agents in 2012 to 100 this year. The firm is in the process of physically expanding its Sag Harbor office, one of four the company has on the East End, while actively looking to hire agents with a “track record” in the area, said John Gicking, a Sotheby’s vice president and brokerage manager for East Hampton.
Sotheby’s is marketing two of the most expensive listings currently on the market: 20-30 West End Road in East Hampton, which is listed for $75 million with Frank Newbold and Ed Petrie, and a Bridgehampton estate at 939 Scuttlehole Road with a private golf course listed with Dana Trotter for $60 million. The property, known as Three Ponds Farm, has been on the market since 2008.
Trotter said the eight-bedroom home also has a pair of three-car garages, and a grass tennis court. “The 60 acres alone are incredibly unique,” she said. “There’s not a single other property [in the Hamptons] that offers a private golf course.”
Nest Seekers International, which opened its first Hamptons office in April 2011, is ranked No. 7 on TRD’s list. The company has seen its East End agent numbers grow only slightly since last year to 49, but has laid out an ambitious business plan to increase its presence further, according to Geoff Gifkins, regional manager for the company’s four Hamptons offices. Nest Seekers’ goal: To double its size by growing to 100 agents by the end of the year, in part to fill a new Bridgehampton office that opened in February, Gifkins said.
As part of this recruiting push, Nest Seekers recently hired Laura and Carl Nigro away from Douglas Elliman, Gifkins said.
Halstead, a major New York City firm, is also a newcomer to the Hamptons: It entered the market with the purchase of Hamptons real estate brokerage Devlin-McNiff in October 2011.
In the past year, Halstead has seen its East End agent total nearly double, from 19 last year to 30, though it remained at No. 10 in the rankings. And the firm is planning to hire even more agents for a new Southampton office at 31 Main Street, slated to open this month.
Anthony DeVivio, the managing director of Halstead in the Hamptons, said that its agents benefit from its smaller presence in the region, since there are a limited number of Hamptons brokers for New York City Halstead brokers to refer clients to.
“There are a number of firms that have a large New York presence, but have a very large presence out here as well,” DeVivio said. “Brokers in those firms are sharing that New York presence with 200 or 300 brokers out here.
“In the case of Halstead, it’s [30] brokers that are sharing that New York presence,” he said. “So it’s a great referral source.”
20-30 West End Road in East Hampton, which is listed for $75 million with Sotheby’s
Trimming the fat
Corcoran may have dropped to No. 2 this year, but its agent count stayed basically the same as last year. Ernie Cervi, the executive managing director of Corcoran’s Hamptons office, said the firm has hired some agents in the past year, but that most brokers are staying in place now that the economy has improved.
“In the past year people have been busy, so wherever they are, they stayed,” he said.
Corcoran’s priciest listing on the East End is a $59 million, 33-acre estate in Sagaponack listed by Debbie Loeffler and Julie Briggs. The eight-bedroom, 11,700-square-foot home, at 315 Bridge Lane, is complete with a mahogany-paneled library, limestone entry gallery, six fireplaces and a screened porch. Loeffler dropped the price of the home in early June by $6 million, after it was on the market for nearly a year. Lately, she said, there’s been a lot of European interest in the home, she added.
Other firms were clear that they’re getting rid of dead weight. Brown Harris Stevens, for example, has hired about 12 new agents this past year while letting go of a number of part-time agents, Comnas said.
“We have parted company with some agents that weren’t full-time, serious agents,” she said. “And we’ve taken on new agents [who] are exactly that. While our [agent total] hasn’t changed all that much, our agent population has changed.”
Daniel Gale Sotheby’s International Real Estate, a franchise of Sotheby’s that does business in both Nassau and Suffolk Counties, also saw its total number of East End agents drop this year to 41 from 44, placing it at No. 8 on TRD’s ranking.
Daniel Gale’s Carol Tintle, a senior vice president at the firm, seconded Comnas, noting that hiring full-time East End brokers can be a challenge, since the area is largely a seasonal community.
“I’d rather have 20 professional agents than 30 part-time people,” she said.
Century 21 Albertson was the ninth-largest firm, according to TRD’s ranking, with 36 agents — six less than at this time last year. Owner Tom Scalia said he lost several agents, but has recently hired more to replace them.