Sale prices dipped across all sectors of the Hamptons residential real estate market in the final three months of last year, driven by a sharp decline in the sales of luxury properties.
Overall, the median sales price for the area in the fourth quarter of 2016 was $925,000, according to Douglas Elliman’s most recent quarterly Hamptons sales report. By comparison, the median price was $997,000 during the fourth quarter of 2015.
For condos, the median price fell 35 percent year-over year to $390,000. The median price of a single-family home was $950,000, an almost 10 percent drop from just over $1 million in 2015. Prices for luxury properties, the highest 10 percent of all sales, also fell significantly. In the last quarter of 2015 the median price was $8.3 million, while in 2016 it was $5.8 million, a 30 percent drop.
Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report, said the figures indicate a shift from the “euphoria” of previous years, to a “more sustainable” market. He added that conditions are similar to New York City. “The market is soft at the top and tightens as you move lower in price,” he said. “The Hamptons are no different.”
The weakness at the high end of the market is most clearly demonstrated by sales figures throughout the quarter. Overall, closed sales dropped 14 percent year-over-year, and were most sluggish at the top end of the market. Just 37 properties priced above $5 million sold during the fourth quarter, a 40 percent decrease from the record of 62 in the previous year. In the $1 million-to-$5 million market, 200 properties sold, a year-over-year drop of 16 percent. A total of 287 properties under $1 million sold, a fall of 9 percent year-over-year.
Miller said the sharp decline in sales at the high end is affecting the entire market and, as luxury supply is rising, he expects the trend to continue.
“There’s a lot inventory to sell or work off, so I think it’s going to be a while,” Miller said.
Last quarter, the number of Manhattan properties selling for above their asking price dropped significantly, indicating sellers are becoming more pragmatic about the market. However, Miller said many sellers in the Hamptons are still out of touch with reality.
“The sellers’ sentiment is still behind the curve for region,” he said, adding there is still a lot of “aspirational pricing” in the region.
A separate report from the Corcoran Group found sales volume in the Hamptons decreased from $1.2 billion in the fourth quarter of 2015 to $935 million in 2016.