The tax accountants were firmly in control of the Hamptons at the end of 2012, as tax-related selling pushed up sales and average prices, market reports said, leaving the outlook for this year upbeat but uncertain.
In the fourth quarter, 89 homes sold for $2.5 million or more on the South Fork of Long Island, nearly double the number in the same quarter the year before, according a new market report by Brown Harris Stevens.
That reflects, analysts said, a movement by wealthy buyers and their advisers to avoid rising capital gains tax rates this year—with top rate up to nearly 25% from 15% for some taxpayers.
“The accountants were busy,” said Jonathan Miller, an appraiser, who prepared a market report on the Hamptons for Douglas Elliman. Cia Comnas, who oversees sales for Brown Harris Stevens in the Hamptons, said: “There was a lot of stuff scheduled for December that had to close before the end of the year. There was some drama.”
The shifting mix of sales pushed up the average price of a Hamptons home to $2.17 million during the quarter, according to the Brown Harris Stevens report, a 27% increase from the same quarter last year.
The median price was $975,000, up 15.7%.
Data compiled by Mr. Miller dating back to 2005 put the average price in the fourth quarter at the highest on record because of the extra high-end sales. The total number of sales was the highest for the fourth quarter, since the fourth quarter of 2005, Mr. Miller said.
Still, the highest sale of the year wasn’t recorded in the fourth quarter. It was the $28.5 million February sale by Marc Rowan, a co-founder of Apollo Global Management of a large oceanfront house on Meadow Lane in Southampton.
The buyer was Andreas Santo Domingo, an heir to a deceased Columbian beer magnate and businessman, Julio Mario Santo Domingo, according to a broker familiar with the sale.
Despite the record average prices, Paul Brennan, manager of the Bridgehampton office at Douglas Elliman, said some sellers had been willing to cut prices to get their deals done in time.
“In order to make the deals there was a little flexibility,” he said.
But the outlook for this year isn’t as clear. The surge in sales as 2012 ended brought forward sales that would have otherwise closed this year, potentially bringing down sales statistics in 2013.
Yet brokers said that January began with a lot of sales and rental activity that usually happens a bit later in the year. They attributed it in part to unusually warm weather, before snow and freezing temperatures hit in the last few days.
Ernie Cervi, who oversees sales in the Hamptons for Corcoran Group, said that inventory has been falling quarter over quarter all year, as sales have been rising.
“Properties that are priced well are selling fast,” he said, and properties where prices are “readjusting” are selling fast too.
Gregory Heym, an economist who prepared the Brown Harris Stevens report, said that the uncertain size of Wall Street bonuses this year could have an impact of sales during the coming season.
Mr. Miller forecast “stable to rising prices” because of the falling inventory. He said that a weaker first half would likely be followed by a stronger second half as the economy improves.
Across the rest of Long Island prices and sales rose too, compared with the year-earlier quarter. Sales of one-to-three family homes were up 5.2%. The median sale price in the fourth quarter was $362,000, up 3.6% compared to same period in 2011, but down 4% from the third quarter.