2020 saw more listings in the $10M+ price point trade than in the previous two years combined. Number of Sales was up 125.8% year over year, with over $1B of Sales Volume transacted. The odds of selling for listings priced $10M+ in 2020 were 42.86%. Impressive, when you consider that even the hottest markets rarely ever make it to 50%, according to the National Association of Realtors.
Overall, new listings coming to the market in the Hamptons have plummeted since September 2020 and this includes our luxury market. Thirty new listings priced at $10M+ came to the market in September, versus thirteen in October, and the new to market inventory has remained comparably low since then.
Most buyers report that finding a suitable home is a challenge. Bidding wars continue on the few-and-far-between properties that become available with amenities like pools, tennis or special features like private beach access or prime views. But what about the properties that have it all and more?
Only two properties priced $10M+ sold for over the asking price in 2020 and one of them by just enough for the buyer to secure the deal, at 0.25% above the list price. The remainder went for an average discount of -13.88%, with 47.2% of sold listings trading for -10% or more off the list price. Only 14.88% of properties that came onto the market in 2020 have closed, with 6.5% currently in contract. We compared this to the 38.28% properties that sold and the 3.12% that are currently in contract for listings that came to the market prior to 2020.
The data shows that the key to selling for listings priced $10M+ is negotiability. Homes that were listed prior to 2020 had the advantage of gaining market feedback on an improving market prior to the rush to buy caused by COVID and, those who were successful in selling, leveraged this intel to effectively respond when the influx of buyer interest hit.
Pricing these properties is challenging. There usually isn’t a recently transacted neighbor to compare to and, even when one can be found, the property’s features and amenities can be drastically different. Over the last 10 years, we have seen more than one property come to the market well over $20 million and ultimately trade between $10-20 million. This is usually after several years sitting on the market following numerous price reductions, or coming on and off the market multiple times between the original list to close dates. It is, unfortunately, a fairly common $10M+ price point story.
We spoke to several agents currently working in this part of the market. “I’ve recently been brought onto a listing priced over $20M. The current luxury market and more specifically this price category of $20M+ has become a stable and consistent real estate investment for luxury buyers and it’s finally getting the attention it deserves,” says J.B. Andreassi of Nest Seekers, featured last summer on Netflix’s Million Dollar Beach House.
“Historically, these buyers haven’t had a sense of urgency to purchase, but they are actually here this winter and available to view properties in person, allowing them to make more educated and diligent decisions and actually pull the trigger. The tightening of inventory at this price point through Q4 2020 has created a larger sense of urgency to secure something for summer 2021, and consequently we’ve seen an uptick in viewings of properties in this price point as a result,” Andreassi continues.
Others expressed a consistent theme that despite the uptick in interest, it is equally challenging for luxury buyers as it is for buyers in lower price points, just in a different way. Buyers bring offers that feel right, but sellers want to hold out for their price. Will they get it? Time will tell. The data shows that, more often than not, it is the sellers who are willing to substantially negotiate who are ultimately transacting.
The included chart shows the activity of listings in the $10M+ price point broken down by area and also by the number of listings that came to the market prior to 2020, listings that came to market in 2020, and the sum total of listings that were available in 2020, versus the number of listings that have sold and those currently in contract.
We are currently tracking listing activity for all of The Hamptons price points, week by week, starting the first full week of January at Hamptons Market Data.
Adrianna Nava, founder and president of Hamptons Market Data, is a real estate investment strategist and coach who specializes in The Hamptons real estate market.