Hamptons, North Fork Residential Markets Finally Looking Up

The residential market on the East End is back in business.

The Hamptons and the North Fork finished off an otherwise forgettable year with a long-awaited rise in home-sale contract signings, according to Miller Samuel’s monthly report for Douglas Elliman. The year-over-year gain in December ended months of sluggish activity caused by high mortgage rates and sparse inventory.

The increase was likely bolstered by expectations that mortgage rates will start coming down significantly, according to the report’s author, Jonathan Miller. The Federal Reserve paused interest rate hikes at the end of 2023 and announced plans to lower them later this year.

“The uptick in activity is less about rates being currently low and more about the idea that rates will continue to fall,” Miller said.

He added that buyers are purchasing now with the assumption that they can refinance later at more favorable rates.

“There’s an assumption that the Hamptons is an all-cash market,” Miller said, likening perception of the luxury enclave to that of Manhattan. “But really, there’s a large swath of buyers who do rely on financing.”

In the Hamptons, the rise in new signed contracts last month was small, up to 43 from 41 a year ago, but it was the first annual increase since 2021. One troubling sign for brokerages was that new listings declined 26 percent in the same period, to 35 from 47.

On a monthly basis, new signed contracts in the Hamptons dropped 20 percent in December, which was in line with seasonal expectations for the market. New listings plummeted 53 percent.

The North Fork market, meanwhile, maintained its momentum from the previous month.

New signed contracts on the North Fork surged 59 percent year-over-year from 17 to 27, the second annual increase in two months. New listings were up 67 percent in December from a year before.

Among the most noticeable increases in the North Fork was an annual uptick in contracts signed for single-family homes asking $1 million or more. The subset grew 75 percent year-over-year — to 14 deals from eight — in December, following a 44 percent jump in November.

In contrast to the seasonal dip in the Hamptons, new signed contracts on the North Fork were up 23 percent month-over-month. New listings declined in December from the previous month, as they usually do, in this case by 33 percent.

With lower price points than in the Hamptons, the North Fork has more mortgage-dependent buyers, so “the drop in mortgage rates may have had more of an immediate impact on demand,” Miller said. “The advantage in the North Fork is that inventory is coming back, and that’s enabling more sales, on top of rates falling.”