The 1% are shelling out $400K on Hamptons rentals as NYC shuts down

“The season is starting early” amid epidemic uncertainty

With the kids out of school, wealthy families look to weather the coronavirus storm in rentals out east (Credit: iStock)
With the kids out of school, wealthy families look to weather the coronavirus storm in rentals out east (Credit: iStock)

As the reality of the coronavirus pandemic set in for markets and governments last week, much of the real estate world decided to wait and see how things would shake out. But in one market, deals are moving ahead with more urgency than ever.

The market for rentals in the Hamptons has seen a remarkable surge in interest in recent weeks, as wealthy New Yorkers seek to avoid being trapped in their city apartments, agents told The Real Deal. At the same time, more Hamptons homeowners are making the decision to use their properties themselves, putting more upward pressure on prices.

“We had a bidding war last night for an eight-week rental,” said the Corcoran Group’s Susan Breitenbach. The property, listed at $300,000 for the duration, ended up going for $400,000, she said.

“We’re getting maybe 30 to 50 calls a day,” as opposed to the usual two or three calls at this time of year, Breitenbach said. “There are people who want to move in tomorrow, to bring the UHaul van and move in in the morning.”

Some renters, who already have another rental lined up for the summer months, just need a place for two months to tide them over until Memorial Day. Others are looking for rentals for six months through Labor Day, or even longer.

“The season is starting early and it’s happening now,” said Cody Vichinsky of Bespoke Real Estate, adding that his firm had prepared for this scenario for weeks and has helped dozens of clients get into homes. “Rentals are approximately 20 percent higher this year than last year conservatively, and while there are some short-term rentals in the mix, we are mostly seeing long-term rental deals being done.”

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As schools in New York City and the Tri-State area have closed, much of this wave of renters consists of families seeking more open space and less chance of infection. “With the kids being out of school, if you’re going to be with your family, it might as well be in a good environment — and you can really get to know your kids,” said Enzo Morabito of Douglas Elliman. “If you have the luxury to be able do it, why not?”

Uncertainty around city and state policy has given house hunters an added sense of urgency. “I had some people that wanted to move in next week, and they were putting offers in, and they were afraid that de Blasio was going to lock them in the city,” Breitenbach said.

“I’ve never seen the type of increased energy like we’re doing this quarter. We‘re doing several million dollar plus rental deals as we speak,” said Vichinsky. “Its preparation time and people want a sense of security, so if you can, then you do. It’s better to be safe and have a place secured now than wait until it’s all gone.”

But as more people are choosing to stay home either voluntarily or due to travel restrictions, many Hamptons rentals that would normally be available in the summer months are no longer on the market. “A lot of the owners that were going to go to Europe or where ever are not going, and that makes it even more complicated.” Breitenbach said.

Some owners have made their properties available for rent in response to the surge in demand, only to end up changing their minds in response to day-to-day developments, she added.

While coronavirus has proven to be a boon for business in the Hamptons for now, the gravity of the broader situation remains at the front of brokers’ minds. “We cut back on advertising today,” Morabito said. “I said: don’t advertise homes, don’t boast how cool you are, don’t say ‘we’re number one.’

“Our advertising should just say, ‘We’re here if you need anything’ and let’s keep it that way for a while.”