Frigid winter temperatures have just arrived in the Northeast, and beach-ready bodies are thousands of sit-ups away. But for some buyers and summer renters — especially year-end bonus recipients — now is when thoughts turn toward house-hunting in the Hamptons.
After the fall of Lehman Brothers and several years when buyers and renters had the upper hand, in 2011 the Hamptons real estate market showed signs of a revival; agents expect it will continue in 2012. Although prices are still down from the peak of the boom years, they are showing a steady recovery, and more houses are changing hands.
The major brokerages will release their year-end sales reports in the coming weeks, but throughout most of last year, sales were particularly strong at the high end.
Jonathan J. Miller, the president of the appraisal firm Miller Samuel, said 69 houses in the Hamptons sold for $5 million or more in the first three quarters of 2011, compared with 61 in the same period the previous year. In one of last year’s biggest deals, a 55-acre North Haven waterfront estate called Tyndal Point sold last spring for $36 million. Although it was originally listed in 2007 for an eye-popping $80 million, it still brought an impressive figure for a house north of Highway 27, the Hamptons’ main thoroughfare. While the side south of the highway is closer to the ocean, there is nothing shabby about a place on a peninsula with 3,000 feet of shoreline offering sunrise and sunset views.
Mr. Miller said there would have been even more sales in that upper bracket last winter, if there hadn’t been concerns that the Bush tax cuts might be eliminated, which caused a flurry of activity in the fourth quarter of 2010 and a correspondingly quiet first quarter of 2011. He added that the activity in the high end was not necessarily trickling down.
“Are all these trophy property sales a proxy for the state of the housing market?” Mr. Miller asked. “My answer is no. It’s a small sliver of the market, and it’s motivated for very different reasons. If you look at the sub-million-dollar market, that market is flat.”
As for which areas are faring particularly well, brokers say Sagaponack and Bridgehampton are hot, particularly among the finance set.
“It used to be the estate areas of East Hampton and Southamptonwere always the crown jewel,” said Judi Desiderio, the chief executive of Town and Country Real Estate. “It seems there’s a new buyer, a younger buyer, and they’re happy to be in the farm fields of Sagaponack and Bridgehampton.”
Surfers, younger people and those seeking a less buttoned-down night life are still gravitating toward Montauk, which has a more eclectic mix of properties than tony neighbors like East Hampton. But that has not yet translated into huge deals on the high end, said Paul Brennan, the regional manager of the Hamptons office of Prudential Douglas Elliman.
Even so, some noteworthy new properties are being built. Mr. Brennan is selling a 5,000-square-foot modern house with a guesthouse for $25 million, on a bluff overlooking the ocean in Montauk. Designed by James Biber, of Biber Architects, the house has steel-and-glass rooms maximizing views and outdoor space, while a brick-and-wood wing offers more of a retreat.
Gary DePersia, a senior vice president of Corcoran, says contemporary houses are more in demand these days, partly because fewer of them are available.
“A great modern house very often will do better in price per square foot than its traditional brethren,” he said, adding that tastes had shifted toward simpler, sleeker interiors, even in houses externally in keeping with their shingled neighbors.
The median sales price for a Hamptons home was $850,000 in the third quarter of last year, according to the most recent data compiled by Mr. Miller for Prudential Douglas Elliman. That is up 22 percent from the same quarter in 2010 but still down from the peak of $1.1 million in the second quarter of 2007 — typically the strongest quarter of the year.
Although the figures in the report are for all houses sold and do not reflect what most people will pay for a summer house — somewhere between $1 million and $5 million, depending on beach proximity and amenities like a gunite pool — they do highlight market trends.
“From peak to trough, prices fell about 30 percent,” Mr. Miller said. “That was an overcorrection; we’ve already recovered about half of it. I think there’s room for pricing to grow going forward, but that’s going to take a few years.”
Perhaps a better gauge of the market is how many “sold” signs are popping up in front of the hedges. From that perspective, things are picking up. There were 398 sales in the Hamptons in the third quarter, up 12 percent from the same period in 2010. But that compared with 651 homes sold in the third quarter of 2005, the year sales activity peaked.
The year-end reports due out in the next few weeks will show whether the Hamptons mirrored the Manhattan market, which saw a significant slowdown in sales activity at the end of the year. But many brokers are optimistic, predicting that any dip will be a temporary reaction to last year’s stock market swings and economic uncertainties — a pause, rather than the beginning of another freeze.
Diane Saatchi, a senior vice president of Saunders & Associates and a longtime Hamptons broker, says a few high-end deals can skew the data. But she pointed to a more intuitive economic indicator that she said tended to reflect real estate trends.
“You probably can get the best read on the market by looking at the activity on various main streets,” Ms. Saatchi said. “When you see stores full and restaurants crowded, you know business is good. It’s clearly brighter here than it was in 2008, 2009 and 2010.”
Even so, the persistent consolidation of real estate firms indicates some uncertainty about the market.
In December, Town and Country acquired Kathleen Beckmann Real Estate of Montauk, after acquiring the Westhampton brokerage Phillips Beach Realty in March. Last October, the East Hampton agency Devlin McNiff teamed up with Halstead Property of Manhattan, expanding Halstead’s reach into the Hamptons.
For more than a decade, the Hamptons has been subject to an influx of New York City agencies, led by Corcoran and Elliman. But brokers say the latest round of reshuffling is a sign of the economic times.
“The market got smaller after 2008, had a really terrible year in 2009, then in 2010 and 2011 it stabilized,” said Stuart Epstein, the managing director of what is now called Devlin McNiff Halstead Property. “But it’s still smaller than it was. That means there are a lot of people looking to make a living in a smaller market.”
Mr. Epstein said he and his wife, Lynn, decided to partner with Halstead in order to stay competitive, especially given the Internet, which has not so much leveled the playing field as made it more costly for little firms to keep up.
“Really,” he said, “it was a feeling that in order to play in the big leagues at this point going forward, we needed the clout we could get from that company in terms of marketing, technology and their referral network.”
That does not mean local, independent agencies are going away. But for small brokers looking for a lifestyle change or a way to compete in a tougher market, affiliating with a larger firm seems to be gaining appeal.
Although the market is basically trending toward higher prices, few properties are snapped up right away for the asking price. On average, homes sit for 170 days before selling.
In Southampton Village, Joseph Hall and his partner are trying to sell a traditional three-bedroom house renovated to appeal to current tastes, with a wine refrigerator in the eat-in kitchen and a generally minimalist décor. Offered for $1.995 million last fall, the place was originally listed for $2.7 million in 2007.
“That year,” Mr. Hall said, “we didn’t even reply to offers that were higher than where we have it listed now.” The house was taken off the market when the economy tanked. He thinks it is now well priced: “We didn’t expect that it would move immediately and we’re happy to wait it out.”
Mr. Hall and his partner use their house in the summer, but many Hamptons sellers are waiting out longer selling periods by taking advantage of the strong market for rentals.
“The rental market did very well on the high end last year,” said Mr. DePersia of Corcoran. “I think it’s going to be another good year.”
One of his listings, a 12-bedroom Bridgehampton estate with a recreation pavilion (including a two-lane bowling alley, a skateboard half-pipe, a racquetball court, a media room, a disco and a spa), has commanded more than $500,000 for two-week rentals in the past couple of summers.
A 10-bedroom resort in Water Mill ($695,000 for Memorial Day to Labor Day) is also available for short-term rentals, illustrating homeowners’ new willingness to accommodate renters’ schedules.
On the lower end of the scale, he said, summer renters can find a house for $50,000 a month in the Northwest Woods or the village of East Hampton, or south of the highway in Amagansett. Double that price gets you more amenities closer to the beach, and there are cheaper options as well.
“When people rent a house,” Mr. DePersia said, “they make concessions they wouldn’t necessarily make when they buy a house. What’s good to know is that there is a house for everyone out here. It depends on what your level of compromise is and what you’re willing to pay.”
The Hamptons, by the Numbers The median sale price in the third quarter of 2011 was $850,000, a 22.1 percent increase over the third quarter in 2010.
There were 398 sales in the quarter, a 12.4 percent increase over the same period in 2010.
For the top 10 percent of all sales, the median price was $5.45 million, a 22.8 percent increase over the second quarter of 2011.
The Hamptons sales market reached its high point in 2007, with a median price of $975,000.