As Labor Day approaches, summer in the Hamptons draws to a close, but that also means the selling season typically heats up again. It has been a difficult few months with inflation rising, and subsequently interest rates as well. There is a definite real estate market slowdown from the frenzy of the COVID-19 pandemic. Prices have remained at all-time highs, but the number of days that listings are on the market has grown. As we head into the fall selling season, we asked some of the top agents in the Hamptons and North Fork what advice they have for buyers in today’s market. Do buyers need to adjust their purchase goals? Or do sellers need to get more realistic about pricing?
Judi Desiderio, Town & Country Real Estate
“Due to many circumstances — many of which you highlight — the Hamptons real estate markets took a well-deserved summer vacation. After the two-plus years of frenetic pace due to the pandemic, sales trends seem to have fallen back into a familiar rhythm. July historically is the second slowest month — second only to January — but come the second week of August, open houses see better attendance and sales appointments are being followed by offers to purchase. The sheer volume of transactions fueled by the pandemic is behind us, yet the significantly low inventory in many markets is helping to stabilize prices. Buyers and sellers are both feeling the transition from a powerful sellers’ market to a more balanced market. Sellers: It’s important to keep apprised of post-COVID deals when pricing. You still need to make your home as attractive as possible to maximize your return — most buyers wish to walk in with their toothbrush — so making it buyer-ready is optimum. Buyers: More inventory does ordinarily hit our markets this time of year, but beware. . . you’re not the only buyer at the table. Unless of course, you are looking at homes at $100 million. Remember: The only thing constant is change!”
Gary DePersia, The Corcoran Group
“My advice to buyers: stay optimistic. There is a house for you in the Hamptons whether it is already built or in construction. Find a broker you like to guide you through the process. Keep an open mind about what you will look at. Buyers absolutely do not need to adjust their purchase goals. It is still a market where demand exceeds supply. The idea of trying to “steal” a property is probably unrealistic. Be diligent in your search. Let your broker know everything you see online to get their opinion. View a variety of options in person — you may find such homes exceed your expectations from what you see online. Sellers should study the actual inventory that sold recently and take a pricing cue from that. Give real thought about what it would take for you to accept an offer. If your price is light-years away from that figure, perhaps adjust your expectations. If you are not getting showings or offers, you probably overshot the mark. The market is very efficient. It will guide you to the right price if you pay attention and have the right broker.”
Sara Goldfarb, OFFICIAL Hamptons
“Don’t be discouraged by negotiations and time-to-contract taking longer than expected — many sellers are having to reset their expectations in terms of where the market is now versus where it was even just four to five months ago. What used to be two to three days to contract is now two to three weeks, sometimes longer. Your agent, alongside the seller’s agent, should be able to navigate these discussions based on market data — which is readily available for everyone to see. But, don’t sit on the sidelines waiting for prices to drop significantly — we’re moving towards a new norm but that doesn’t mean 2018/19 prices at all. Furthermore, demand still has not caught up with supply, so we’re still seeing multiple bid scenarios. Make the offer — or someone else will.”
Eve J. Combemale, Sotheby’s International Realty
“Buyers reading national news and anticipating dramatic price drops might need to adjust their expectations. While inventory is ticking up slowly, demand is still outpacing supply. Bidding war activity has scaled back, but we are still seeing competition for prime properties in top-notch locations. Buyers remember: if you do fall in love with a property that has just come on the market, chances are someone else will feel the same way, so be ready to move quickly. That means having finances in order and being educated about the market. See everything you can so you understand value and can feel confident about pulling the trigger when the right one shows up. All-cash is always best, but if you’re planning to finance, consider putting down a larger cash deposit and definitely have a pre-approval ready. Try to make a clean offer with no contingencies and be flexible with closing dates and terms to attract the seller towards your deal. I would caution sellers against the aspirational pricing that might have worked during the COVID frenzy. Most buyers are eager but are no longer willing to overpay.”
Timothy O’Connor, Brown Harris Stevens
“As summer comes to a close, everyone is hoping more inventory will come to market; supply is one major challenge we have faced over the last few months. For buyers, I recommend they be prepared to move quickly when a property comes on the market and to have all their finances in order while also having started a conversation with a local attorney. I also recommend buyers present all-cash offers with no financial contingencies when possible, keeping in mind that they can always finance at the closing. For sellers, I strongly recommend bringing a property to market which is priced to sell, and not some inflated figure. Most buyers are well-educated on pricing, comps and if the house was recently purchased during the pandemic. A buyer is not going to pay a premium in this market and my goal is to educate a seller so their property moves quickly during the sales process.”
Adrianna Nava, Compass
“Buyers should not be scared to act when they find the property that meets their needs and, especially, wants. Inventory, though increasing, remains low relative to a stable marketplace and it could be a while before something just like that one you wanted is available for sale. Sellers who have timing goals should set realistic pricing based on recently sold comparable properties. The Hamptons is a unique real estate market because there is often a value placed on the enjoyment of the property and this is a subjective value. The best strategy for buyers and sellers in a transitioning marketplace is to listen to the feedback and be willing to compromise with the other party when necessary.”
Constance Porto, Douglas Elliman
“With the market frenzy due to COVID behind us, there is definitely a different climate in real estate. Although we have a lot more inventory than we did during that time, we are still under availability. In a normal market, we would see almost 300 homes on the market. During COVID, we were in t he 20s. Now we are a little above 60 homes on the market in Hampton Bays. We still have a lot of activity with buyers. I think this is because they are trying to get in before rates go even higher. We do see price adjustments in the market but not extreme ones. I feel that sellers should consider offers when they come in lower than list price. We are not getting a high volume of over-ask offers since interest rates have gone up. I also feel buyers should seriously consider purchasing now rather than later because interest rate increases will likely be much greater than any decrease in home prices in the Hamptons.”
This article appeared as the cover story for the September 2022 issue of Behind The Hedges. Read the digital version here. Also, be sure to check out past Real Estate Roundtable columns.