The number of listings with signed contracts declined for the fourth week in a row and new listings to the market declined for a third week. So far, the average number of sold listings per week for 2021 has been about 24 properties. But don’t let that fool you. Demand is just as high as it was a few months ago.
Enough properties have gone into contract in the last four weeks that could put the number of closed listings this spring at least 60% higher than the same period in 2019, which was stronger than 2020 at the same time.
Twenty five sold listings were noted this week, including 30 Spaeth Lane in East Hampton, listed by Peter Turino and Christopher Burnside of Brown Harris Stevens, which sold, according to the listing, for $60M, a discount of -10.44% from the $67M list price. The six-bedroom, five-bathroom, 7.7-acre, oceanfront retreat was listed for $72M on July 28th, 2020 but reduced to $67M at the end of August 2020. It went into contract on February 25 and closed 17 days later on March 15.
The Hamptons real estate market is going through a second adjustment since the COVID-19 pandemic. The first was in November and it was unclear how much of the dip was due to the holiday season and how much was due to buyer-response to lack of relevant listing inventory. This time it is clear and the answer is the inventory draught.
Days to contract increased for the third week in row, signaling that the persistence of low new listing inventory is causing buyers to continue to revisit and bid on properties that have been on the market or to wait for more suitable inventory to come on the market. The numbers of sold listings recording (comparable trades to reference) is causing sellers who have been on the market to come to terms with their properties’ values. The result is that we are in the second wave of price increases, the first occurring in August through September, in the Hamptons, especially in the less than $5M price points. Unlike in 2020, some sellers who have held out are now seeing bids much closer to their asking prices.
In 2020, most bidding wars did not end with over asking price trades, but now, they are. Properties that come onto the market within market range will more than likely get a deal over the asking price. Properties that are on the market that reduce to the range in which they have received offers previously are also receiving multiple bids.
Economic growth is projected to be strong in 2021, while interest rates may stay at record lows until 2023. Hamptons rental prices have increased in tandem with sales prices. Uncertainty in how the stock market will respond to the Federal Reserve’s decision regarding rates potentially not keeping pace with inflation makes real estate a relatively safe investment and the Hamptons a convenient and beautiful location, as New York City recovers from the impacts of COVID-19. NYC is not dead, it’s entering revival and the Hamptons market will likely stay strong for a while as a result.
Last week, 39 Conklin Terrace in East Hampton, listed for $4.75M by the Kulman Team of Compass, went into contract. It was brought on the market in June 2020 for $4.5M, increased its price in November, as is typical once construction is complete, and found a buyer last week. While we do not yet know the agreed sale price, Kulman confirmed that this deal will set a price record on its street and in the immediate neighborhood.
The property at 100 Meadow Way in East Hampton was listed October 1, 2020, by Rebekah Baker of Sotheby’s International Realty for $3.795M, reduced to $3.495M on October 31, and also found a buyer last week. Responding to the market, whether up or down, is effective in getting sold.
Even better is listing within market range. Cindy Scholz of Compass listed 152 Hands Creek Road in East Hampton in keeping with comparable recently sold properties at $3.5M and also received multiple bids, putting the property into contract in just 10 days from coming to the market.
“It’s one of the most magical homes in the Hamptons – the grounds are an absolute oasis with a koi pond and views of the horse farm. It’s one of a kind and the market reacted to the unique qualities,” says Scholz.
Ginger Thoerner and Debbie Koster of the Clark Thoerner Team of Sotheby’s listed 509 Paul’s Lane in Bridgehampton for $5.495M and it went into contract just 12 days later.
“In the $5-6M south of the highway market, especially in Bridgehampton south, there is pent up demand from an audience of buyers who missed out when looking for a move-in ready home,” says Thoerner. “These buyers were ready when 509 Paul’s Lane came to the market and they acted quickly,” she continues.
Built in the late 1980s, the home is older, but it is move-in ready. It is on a prominent street and, with the ability to add an extension or even rebuild, it has upside. Some new construction in the neighborhood is valued around $15M so whatever the buyer chooses to do to the property, he or she will have wiggle room when making improvements.
“We had 21 buyer showings and multiple offers, some above the asking price,” Thoerner explains, confirming that the deal will close over the asking price.
If you haven’t heard anyone say it recently, now is the time to sell, but it is also the time to buy. If listing inventory will remain low (which looks very likely), prices are going to continue to increase until a different kind of adjustment occurs. It’s not a bubble in the same sense as 2006/07 was so, this may take a while.
If you’re a seller and you’re going to list just below market range and watch the over asking price bids roll in, make sure to allow enough time for the property to be shown. A good strategy is to list early in the week, set showing appointments for Thursday or Friday through Sunday and accept bids until early in the following week.
If you’re a buyer and you’re entering a potential multiple bid situation, be fully prepared and come in quite literally the most you would pay for the property. To keep your energy up until you land your Hamptons dream home, make sure you don’t care if you lose… because you wouldn’t have wanted it at that price anyway, right? If there is any doubt, bid higher or you’ll likely kick yourself later.
Learn more about the Hamptons real estate market today here. Previous market insights can be found here.
Adrianna Nava, founder and president of Hamptons Market Data, is a real estate investment strategist who specializes in The Hamptons real estate market. To read her previous column, click here.