The residential real estate markets in the Hamptons and North Fork are cooling after record activity during the height of the pandemic.
New signed contracts for single-family homes in the Hamptons in February were down 45.5 percent year-over-year, while new listings held steady, declining by just 1 percent, according to a Douglas Elliman report by Miller Samuel.
“We’re coming out of a heady 2020 and 2021 back to a more normal level,” report author Jonathan Miller said. “It’s not weakness, it’s lack of supply.”
In North Fork, 32 contracts were signed last month, one fewer than a year ago, and listings were up 78 percent. While that increase might seem to point to a hot market, Miller said it’s indicative of a return to normalcy: North Fork listings all but disappeared at times last year.
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Supply in both markets was eaten away by two years of record and near-record activity, as Long Islanders and wealthy New Yorkers sought more spacious, isolated properties or just accelerated homebuying plans in response to the pandemic and low interest rates.
Now the lack of supply is constraining listings and sales. North Fork and the Hamptons are seen as separate from each other and the rest of Long Island because they serve as second-home communities for many Long Islanders and New York City residents.
Changes to federal SALT deductions and the arrival of New York’s mansion tax created a soft market in the Hamptons before the pandemic, yielding a glut of inventory. Things have gone the other way since.
“The pandemic era is characterized not by a decline in inventory but a collapse in inventory,” Miller said. “The collapse has been caused by insatiable demand and a structural change in the way the Hamptons is perceived: It’s a co-primary market now instead of a luxury, second home market.”
Signed contracts decreased year-over-year across all price ranges last month in the Hamptons, while new listings saw volatility between the different tranches.
There was an increase in homes listed for $5 million to $10 million and homes listed at $1 million to $4 million. The biggest decrease came near the top of the market, with homes listed from $10 million to $20 million falling by 58.3 percent.
In North Fork, contracts signed for homes listed for $1 million to $2 million rose to 13 from eight in February 2021. No homes were listed under $500,000, compared to three last year, and only one was listed for $2 million to $4 million, compared to four last year.
There are very few condominiums on the North Fork. In February, one contract was signed for a condo, the same as February 2021, and listings for condos fell to two from four.