It’s been whispered about for months, but now the numbers prove it: The Hamptons real estate market slumped last year. Reports compiled by the major brokerages show that prices have slipped and sales have slumped, with particular weakness in the luxury market, despite a few headline-making sales.
Data provided by appraiser Jonathan Miller for Douglas Elliman demonstrate that the median price of a Hamptons property in 2016 fell 5.3% from 2015, and the number of sales was down by 13.7%. Corcoran’s numbers run as follows: The average sales price for 2016, $2.15 million, was down 1% from 2015. The median price at $995,000 slid 11% from 2015, when it was $1.19 million. And Corcoran says the number of sales was down a stunning 24%.
The biggest deal of the year was the sale of three parcels on Lily Pond Lane by hedgie Scott Bommer. Together the parcels added up to $109 million, which is a mere $40 million an acre (or so). Bommer had paid $93 million for the land back in 2014. The second biggest deal was the purchase (also on Lily Pond Lane) of an oceanfront estate by David Geffen for $70 million.
These blockbusters aside, the luxury market (the top 10%) was quite soft in 2016. Elliman’s report put the average luxury sale price at $7.06 million in the fourth quarter, down 17% from the same quarter in 2015. The median price slipped 6.4%, at $5.85 million.
So where do we go from here? According to brokers, the under-one-million market in the Hamptons right now is smoking hot. Ed Bruehl at Saunders says last year was skewed because the third and fourth quarters were flat-to-down, because of the uncertainty around the election. The year ended much better than we thought it would and the new year is already ahead of 2016.
If you are looking for value, buy land or a teardown—an older house—and build a custom home. The most attractive under-the-radar locations are the East Hampton Village fringe or in any hamlet. And the Northwest Woods offers quiet, privacy and proximity to Sag Harbor and beautiful bay beaches.
