Contracts for Hamptons, North Fork homes fall 50%
High interest rates are keeping sellers out of the market, according to Jonathan Miller
Life is tough for brokers on the East End.
The North Fork and Hamptons markets in November showed no sign of emerging from the home inventory shortage that continues to constrain sales.
New signed contracts in both markets fell over 50 percent last month from a year ago, according to a report authored by Samuel Miller for Douglas Elliman. Rising interest rates and a lack of listings following the pandemic buying spree were to blame.
“Sales are way off the year-ago boom, which is the same condition we’ve been reporting since the late spring, ” said report author Jonathan Miller, who added it’s important to remember that last year’s market was historically hot, so the year-over-year drops should be taken in context.
In the North Fork, new signed contracts continued an annual decline that began in May. While inventory ticked up slightly from a year ago, Miller said it’s too early to call that a meaningful trend.
Also, the sample size is small: New listings rose to 29 from 22. Four more homes asking between $500,000 and $1 million hit the market last month than did in November 2021.
If sales stay slow, the number of homes on the market should increase. New signed contracts fell 57 percent year-over-year, to 18 from 42.
“It wouldn’t be unrealistic to expect a bit more inventory floating in with the continued decline in new signed contracts,” he said.
A similar scenario is playing out in the Hamptons, where new inventory has fallen on an annual basis in all but two months since June 2021. New listings last month fell 18 percent, to 81 from 99.
New inventory was down across all price tranches except for homes asking between $10 million and $20 million, with three more homes in that category listing this November over last.
“Declines have been consistent and don’t seem to favor a particular price point,” Miller said. “I think a big part of that is people are wedded to their mortgage rate.” Meaning, owners who locked in 30-year loans at around 3 percent are not inclined to move and end up with a mortgage at twice that rate.
New signed contracts in the Hamptons fell 53 percent, to 63 from 134. Contracts fell across all price tranches except for homes asking less than $500,000, which are rare on the South Fork, and those asking between $10 million and $20 million, which held even.