Home prices in New York’s Hamptons, the resort towns on the Long Island coast, rose to the highest on record as deals at the upper end of the market surged before expected tax increases for sellers.
The average price of homes that sold in the fourth quarter jumped 35 percent from a year earlier to $2.13 million, the highest since Miller Samuel Inc. began tracking Hamptons sales in 1999, the appraiser said in a report with brokerage Douglas Elliman Real Estate. It was only the second three-month period that the average purchase price topped $2 million, said Jonathan Miller, the New York-based firm’s president.
“There’s clear evidence of this year-end rush in anticipation of higher taxes,” Miller said in an interview. “We just had a lot of sales at the upper end of the market because the more affluent were more likely to be proactive.”
There were 49 sales in the quarter for more than $5 million, the most since 2006, when Miller Samuel began tracking that data. The quarterly average for the past six years is 23 such deals, Miller said. High earners were expecting to see their tax burden rise as Congress negotiated a budget deal into the new year. The top rate on dividends and capital gains climbed on Jan. 1 to 23.8 percent from 15 percent, including a 3.8 percent tax from the 2010 health care law.
The median price for all luxury transactions, the top 10 percent of all sales by price, climbed 17 percent from a year earlier to $7 million, Miller Samuel and Douglas Elliman said.
“December was, like, crazy here,” said Judi Desiderio, president of Town & Country Real Estate in the Hamptons, which released a report on the market on Jan 18. The year “was like a snowball rolling downhill.”
The dollar volume of homes that changed hands in the fourth quarter surged 51 percent from a year earlier to $771 million, according to Town & Country. The median sale price rose 19 percent to $975,000.
Among deals in the quarter was one by Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein, who bought a seven-bedroom home in Bridgehampton that was listed for $32.5 million. The Ocean Road property includes a tennis court, pool, “sculpted gardens” and “a winding driveway to a home of which dreams are made,” according to a June 2009 rental listing on StreetEasy.com, a real estate website.
The sellers were Matthew Mallow, general counsel at BlackRock Inc., and his wife, Ellen Chesler, a senior fellow at the Roosevelt Institute. Blankfein, 58, took title to the home in the fourth quarter, a person with knowledge of the deal said on Dec. 7. The sale price hasn’t yet reached public records.
Also in the quarter, an eight-bedroom oceanfront home on East Hampton’s Drew Lane sold for $24.7 million. The 7,000- square-foot “European villa” sits atop a dune, according to the listing on Zillow.com. The owners sought $40 million for the property in April 2010, the website shows.
The inventory of available homes for sale in the Hamptons plunged 12 percent to 1,023, the lowest in the six years that Miller Samuel has been tracking that data. The absorption rate, or the amount of time it would take to sell all the properties at the current pace of sales, is 5.8 months, the fastest since 2006 and down from 8.6 months a year earlier.