In 2020, the South Fork saw $5 billion worth of property trade, falling just shy of beating 2018 and 2019’s combined volume of $5.12 billion.
This data, compiled by Adrianna Nava, a real estate investment advisor and the force behind Hamptons Market Data, was the center of a recent virtual panel discussion, during which five agents joined her in taking a deep dive into market trends during this banner year in East End real estate.
“Interest rates are a big part of the 2020 story as much as COVID was,” Nava explained to the 100 listeners interested in the state of local real estate going into 2021.
The 30-year fixed mortgage rate had been on a decline since the fall of 2019 and only fell lower during the pandemic — it is now at 2.65%. “This is now a number that most people have never seen in their lifetime, that their parents have never seen in their lifetime,” said Nava, who has previously worked at Sotheby’s International Realty and Compass
It teed up for a busy 2020, despite a dip in the inventory after the initial exodus from the city during the beginning of the pandemic. A softer market before COVID helped to sustain the market during this busy time, Nava said.
“The uptick in business was incredible and we all had to learn how to communicate through Zoom meetings, emails, and phone calls and even virtual walk-throughs were happening,” Angela Boyer-Stump of Sotheby’s International Realty said. “It was challenging but the end results were phenomenal for 2020, it was just such a banner year.”
Sarah Minardi of Saunders & Associates said the COVID-19 shutdown “stressed out the system” early on, but she did not feel it slowed down the work at all. There was “definitely a catching breath moment where people had to figure out whether they were doing the right thing in terms of purchasing a home.”
Meanwhile, “a cosmic shift” happened where buyers are purchasing homes that will be the center of their life, a place to not just sleep or spend a weekend, but a place that will double as their office or classroom for their kids, Minardi said. “It’s a real change in lifestyle and community. It’s not just about buying a house anymore. . . We used to think about buying houses as a landing pad. . . now your home is your center of your life.”
James Peyton, a Corcoran agent, reported, “I didn’t have one deal that didn’t make it to contract, that didn’t close,” though he noted there were some “more polarizing negotiations especially when Wall Street had huge swings.”
As COVID-19 restrictions started to ease in the spring, the market saw “exorbitant new listings and as a result sold listings as well,” Nava explained. A second dip in inventory happened again in the fall.
“The wealth is outweighing the inventory,” said Cindy Scholz of Compass, adding that it is the same in other luxury markets, like Aspen, where inventory is tight.
There was an influx of new buyers at the low to mid $2 million price point because of the low interest rates.”Because of the increase in median price with low interest rates, people who typically would have rented are looking at a 10-20% down payment — it’s what you would pay for a summer rental now — so we’ve seen a switch in mindset, resulting in an increase in the buyer pool,” said Sara Goldfarb of Douglas Elliman.
The days from on market to contract on new inventory were down last year. The data shows 17.6% of properties sold in 2020 went into contract in 45 days or less compared to only 6.33% in 2019.
Nava reported for the first time since the last week of September that the number of new listing to the market exceeded the number of homes in-contract. Is the market starting to catch up with the demand, she asked?
“It’s still a challenge,” Minardi said. “The amount of quality inventory is certainly less than the demand,” she said, adding that finding a turn-key home with a pool under $2.5 million in East Hampton Village, where her business is focused, is near impossible. “What I’m trying to do is encourage anybody who was on the fence about potentially listing the house. . . to put it on the market.”
Homes, particularly in the $1-$3 million range, have anecdotally been going for over ask, many with bidding wars. The most substantial above asking price trade was 5 Surf Drive in Amagansett, which closed on March 16, 2020, at $1.8 million, 28.57% above the $1.4 million list price, according to Nava.
But, the overall numbers show a different story — 76.26% of properties sold in 2020 traded for less than the list price. Only 11.78% of properties sold traded for more than the list price, with 11.96% going at the list price.
Almost 20% of properties sold traded for discounts of 10% or more off the last asking price.
People are clamoring for rentals. Boyer-Stump said the first rental deal she did so far this year went for $525,000 when it was listed at $495,000. She never thought she would see rentals go for over ask. “If you want something, you should make your offer at full price,” she said.
Peyton even said he has suggested his buyers start at 10% over ask.