Home sales in New York’s Hamptons, Wall Street’s favored beach retreat, jumped to a seven-year high as buyers rushed to secure deals before expected increases in prices and mortgage rates.
Purchases in the three months through June totaled 675, up 25 percent from a year earlier and the most since the second quarter of 2006, when home values were climbing toward their peak, according to a report today by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Buyer competition for a small inventory of listings pushed the median price up 8.2 percent to $920,000.
“People are saying, ‘If there’s a time, now’s the time,’” Paul Brennan, Douglas Elliman’s regional manager in the Hamptons, said in an interview. “Interest rates are probably the driving force. Everybody from Bernanke on down are making gestures that these rates can’t last forever.”
Mortgage rates have climbed from near-record lows amid expectations that the Federal Reserve, led by Chairman Ben S. Bernanke, will scale back bond purchases as the U.S. economy returns to health. Buyers lured to the Hamptons, where prices have climbed 36 percent from a low in 2009, also are rushing to beat competitors to purchase a home as the supply on the market dwindles, according to Jonathan Miller, president of New York-based Miller Samuel.
The number of properties listed for sale in the quarter fell 13 percent from a year earlier to 1,573, Miller Samuel and Douglas Elliman said. The Hamptons, a group of villages and hamlets on the eastern end of Long Island, is traditionally a second-home market.
The absorption rate, or the amount of time it would take to sell all the properties at the current pace of deals, was seven months, the second-fastest in more than six years of record keeping. The rate was 10 months a year ago.
“The market is moving faster because you have more people looking at less product,” Miller said in an interview.
Sellers in the Hamptons aren’t listing their properties quickly enough for eager buyers, according to Miller. Owners who bought during the peak, when the median price reached $1.1 million, may not have enough equity to sell now so they’re waiting for values to climb further, he said.
“Your job is fine, your income is fine,” Miller said. “The numbers just don’t work for you to sell so it’s not in your plans. Story over.”
The average rate for 30-year fixed mortgage climbed to a two-year high of 4.51 percent earlier this month after reaching a near-record low of 3.35 percent in early May, according to McLean, Virginia-based Freddie Mac.
Purchases for less than $1 million accounted for 55 percent of all deals in the second quarter, Miller said.
The median price for luxury properties, the top 10 percent of all deals, fell 19 percent to $5 million, according to Miller Samuel and Douglas Elliman. There were 33 purchases for $5 million or more, down from 38 in the second quarter of 2012.
The quarter’s most-expensive transaction was the $25 million purchase of a 7,207-square-foot (670-square-meter) waterfront home in Southampton Village, according to Miller and property-listings website StreetEasy.com. The deal was completed on May 1.