Paradise on Earth: Why Real Estate in the Hamptons Just Keeps Getting Hotter
It’s impossible to picture a luxurious New York City lifestyle without envisioning weekends and holidays spent in the Hamptons. This quintessential enclave is the epitome of an A+ location, with its wide array of options for outdoor and cultural activities alike – not to mention its proximity to the city.
While its popularity skyrocketed even higher during the pandemic, agents at Sotheby’s International Realty say the market remains as desirable as ever. Here’s what top Hamptons agents are seeing in terms of demand and opportunity for this summer and beyond.
Hamptons Beckons as a Year-Round Market
During the pandemic, the Hamptons saw a significant influx of New Yorkers who fled to their second home or wanted to purchase one for that reason, which established it as more of a permanent location than it had been before. “It made people realize the Hamptons were not merely a summer getaway, but a community where you can live year-round,” says Deborah Srb, an agent in Sotheby’s International Realty – Southampton Brokerage. “That means owners are finding even greater value in their Hamptons properties than when they were used more exclusively for summers and holidays.”
This factor is also making the Hamptons more sought-after than ever among buyers who are further driving up prices.
Clients have reassessed their goals for work/life balance, and the Hamptons delivers, says Dana Trotter, a Sotheby’s International Realty agent in the Bridgehampton brokerage. They see it as a refuge and are becoming accustomed to the lifestyle here and the opportunity to enjoy a more spacious home than in the city.
In fact, Marilyn Clark, also with Sotheby’s International Realty Bridgehampton brokerage, finds many have even reversed their living model. “As more people work in hybrid arrangements, they might choose to be in the city two days a week and the remainder here, which is the opposite of how it used to be,” she says. Her clients looking for both Hamptons and city properties are often willing to spend more on their Hamptons home, given that they expect to use it more.
Clark has also noticed a positive outcome for clients who had previously bought large properties with the intent of attracting their grown kids and grandchildren. In years past, many had been initially disappointed that their kids had moved away, but now as they flock back, the plan to develop a family haven has been a success.
Demand Still High, Especially for the Right Properties
Even as prices escalate, demand continues unabated, notes Ritchey Howe, a Sotheby’s International Realty agent in the Southampton brokerage. “I see homes being snapped up if they are priced right and have the look buyers want, which is primarily ones that are renovated or new,” she says, adding that houses that need work tend to linger longer. “Spruced-up properties, especially those under $3 million, are disappearing in the first week, often after bidding wars that can push the price 20 to 30% over asking.”
Howe finds would-be buyers are most interested in turnkey properties because they want to start enjoying them right away, and there’s also a concern they wouldn’t be able to immediately obtain the building supplies and contractor support needed for renovations. “In addition, they are more laser-focused on how they want to spend their time, and it’s not negotiating services and overseeing work.”
Agent Zack Dayton in the Sotheby’s International Realty – East Hampton Brokerage concurs. “Buyers are most interested in move-in ready properties, and we are seeing fresh demands for features that might have been less important in the past, like a home office, gym and even a movie theater,” he says. “There is no question that the fact workers can split their time is leading to a high velocity of transactions.”
Given this limited inventory, Sotheby’s International Realty agent Rebekah Baker, also in East Hampton, believes building relationships with other agents is more important than ever, which is where the global network of Sotheby’s International Realty gives clients an advantage. “We’ll hear about houses that are quietly listed or have conversations with our fellow team members about a buyer who needs a specific type of property,” she says. “That agent might know about a particular seller who’s on the fence, but if you tell them there’s a potential buyer, that can make all the difference and lead to a sale.”
Real Estate Offers New Opportunities for Savvy Investors
This demand also may be driven by the current economic climate, says Srb. “As we see stocks, bonds and cash lose some of their purchasing power as inflation rises, investing in real estate becomes an ideal inflation hedge,” she says. “Smart money knows real estate is tangible. There’s no better place to park money than a beautiful home in an amazing part of the world. It’s something you can enjoy today, rather than an intangible investment that is subject to market whims.”
Trotter has seen a similar response from clients who prefer the stability of a hard asset. “The Hamptons over time have proven a solid investment. Even when there are minor corrections and blips in pricing, the market rebounds quickly.”
That could be one of the reasons they are seeing a strong renewed interest in very high-end properties, points out Ethan Dayton, an agent in Sotheby’s International Realty – East Hampton Brokerage. “We believe it may indicate an acknowledgment of stock price, inflation, and recession fears causing the most financially savvy players to move some of their money into the solid comfort of a real estate investment, rather than more uncertain markets in this volatile world,” he says. “Living in a seaside community surrounded by open country and historic charm is a dream for many. Hamptons’ real estate has proven to be a smart investment that appreciates well over the long term.”
2022 Hamptons Rental Market Poised for Takeoff
Most consumers have become accustomed to a level of uncertainty that can make it challenging to make concrete future plans, which could be one of the contributors to a slower spring rental season. But while rental activity has taken time to gain speed, agents see plenty of opportunity in the next few weeks.
People have been a little hesitant to make firm plans, but as it starts warming up in the city, we predict there will be a huge increase in last-minute deals as they find and book that summer place, says Baker. She has seen noticeable interest in properties that offer more of a compound feeling where the immediate family can be in one house and then they have an adjacent property or guest house for visitors.
Many homeowners also may have started with aspirational pricing, yet will revisit that as they work to entice these late-stage renters. “Landlords could name their price amid record demand in the 2020 and 2021 seasons when travel to other destinations was largely off-limits,” says Zack Dayton. As would-be renters start to figure out their summer plans, including getting a better handle on where they will be working, interest will rise along with the temperature.
“Summer rentals in the Hamptons will always be in demand,” Ethan Dayton agrees. But he cautions there might be increased inventory with some homebuyers who purchased during the pandemic adding to the rental pool. In addition, he says, “People who previously spent the entire summer in the Hamptons are now splitting their time traveling elsewhere for parts of the summer to satiate pent-up demand.”
Srb adds she is starting to see rental price decreases. “No one wants to pay 2020 pricing, and they don’t have to with the current abundance of rentals. Pricing needs to be much more competitive and should return to 2019 levels at a minimum.” However, just as with a purchase, the properties going the fastest will be high-end homes or those with all the bells and whistles that renters covet. “We see strong demand for amenities that promote an outdoor lifestyle, such as upscale outdoor and movie/TV rooms, along with fire pits and spas,” Srb says.
This is the time to book a fantastic rental, Howe says. “There are lots of properties at a variety of price points as owners look to finance their own vacation or get back some of the money they invested in their beautiful real estate.”
Is this the summer you finally bask in the beautiful Hamptons sunshine in a luxurious rental or acquire a dream property to build family memories for years to come?
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