PRESIDENTS’ DAY weekend is when New Yorkers typically take advantage of the three-day break to: a) fly somewhere warm; b) hit the slopes; or c) look at houses in the Hamptons.
If you answered “c,” you’ve probably already booked a weekend full of appointments to find a desperate seller ready to make a deal, or a summer rental before the best decks and pools get snapped up.
So how is the Hamptons real estate market doing, a year after freezing solid?
A lot better than many people expected. Sales picked up significantly in the second half of 2009, as sellers dropped their prices and buyers made more realistic — as opposed to “lowball” — offers.
But even though list prices have fallen from the lofty levels homeowners once hoped to get, actual sales figures have not dropped off a cliff. The median sales price of a Hamptons home was $825,000 last year, according to Miller Samuel, an appraisal company that compiles market reports for Prudential Douglas Elliman. Although that’s down 15 percent from the peak of $975,000 in 2007, it’s only a 3 percent decline from 2008 and roughly where prices were in 2006.
“If you had asked me last year at this time where the market was going, I would have said: ‘Do you have a spare room? I might need to move in,’ ” said Paul Brennan, regional manager for Douglas Elliman’s Hamptons office. “But disaster has not happened. We did much better in ’09 than we ever would have anticipated.”
According to Miller Samuel’s data 409 homes sold in the Hamptons in the fourth quarter of 2009, compared with 145 in the first quarter, with a steady pick-up in between. The year ended with 1,124 sales, still quite a dip from the roughly 2,300 deals done annually in the Hamptons between 2000 and 2007.
As Mr. Brennan pointed out, the current figures represent contracts that were signed in the summer and fall, since there is a lag before deals close. And since the busy second half of the year reversed the typical pattern — which usually sees a flurry of deals early in the year so buyers can settle in before summer — he is not sure the recent burst of activity will hold up.
“Right now I’m not seeing the same strength in the market,” he said. “But rentals seem to be active, and that’s a good sign.”
Other brokers agreed with that assessment of the rental market, saying they’ve been getting calls from clients interested in looking at houses in December and January, which is usually a slow time. Presidents’ Day weekend typically kicks off the search for a summer home, though agents say they’ve even had midweek showings recently as some renters jump the gun.
Rick Hoffman, Corcoran’s regional senior vice president for the East End, said he expected prices for summer rentals to be in the same range as last year, which was not the usual bonanza for landlords — despite rents in the tens of thousands or even hundreds of thousands of dollars. Many renters could only afford a Hamptons escape for a month instead of the usual Memorial Day to Labor Day contract, and it was not uncommon for renters to ask for and sometimes get 20 percent or 30 percent discounts.
“I think landlords realize last year was a difficult season, and they’re not trying to raise prices,” Mr. Hoffman said. “And we’re advising them not to.”
Whether prices will be as negotiable as they were last year is anyone’s guess, brokers said, although the burst of early interest suggests anyone picky about décor or proximity to the ocean might want to head out to the East End soon.
But “if it’s just about the money, come late,” Mr. Hoffman said. “You might find something that no one else wanted, and the landlord may be willing to discount.”
Early inquiries from renters about the summer season prompted Gerry Logue aggressively to drop the price of the three-bedroom home in Sag Harbor he had been trying to sell since mid-2008. Although he had lowered the price several times, landing at $1,495,000 last fall, it wasn’t until he reduced it to $1,195,000 in January that the offers started flooding in.
“My goal was to do a major shift to move the house,” Mr. Logue said. “When I dropped it, I got tons of interest with multiple offers, and then a deal happened within a week.”
That deal is now in contract at a price he said he is happy with, though given that he had done a major renovation and is selling the contents too — including the silverware and towels — he thinks the buyers are getting a good deal.
“It’s a huge value for this house,” Mr. Logue said. “They can literally show up with their toothbrushes.”
That kind of turnkey property is what Louise Phanstiel and her husband were hoping to find when they were looking at houses in East Hampton last August. Retirees who live in Los Angeles, they did not want to get involved in a long-distance renovation but found most of the homes they looked at needed a lot of work — and seemed overpriced.
“In my opinion nobody really seemed to price things to move and actually a lot of these homes had been on the market quite a while,” Ms. Phanstiel said.
Ultimately they bought a new house in Amagansett that a builder was just completing, for a price she described as fair for both parties.
“There were other people bidding on the house, and they were way under bidding it,” she said. “We met him at a good point, and he came down a bit, and we got it done.”
John Gicking, the couple’s broker at Sotheby’s International Realty in East Hampton, said that flexibility on both sides has been the key to putting together deals in this market.
“Buyers are paying a little bit more than they expected, and sellers are accepting a little less than they would like,” Mr. Gicking said. “Anytime someone draws a line in the sand — whether it’s a buyer or a seller — the deal is not getting done.”
He said most of the deals he has completed recently have gone into contract within 10 percent of the asking price, though he pointed out that some of those homes had earlier price reductions.
According to Jonathan J. Miller, chief executive of Miller Samuel, that is in line with the 13.5 percent listing discount his firm found in the Hamptons in the fourth quarter — the range between the sales price and the last asking price.
Mr. Miller said he expects market activity in the Hamptons to continue at the same level through the spring, kept in check by close to 10 percent unemployment and a tight lending environment.
“In many ways the Hamptons is outperforming expectations during the downturn,” he said, though he does not anticipate Wall Street bankers will swoop in and heat things up.
“Do I think we’ll see a little bump in the spring because of bonuses? Sure, that’s a seasonal pattern,” he said. “But do I think it’s going to create some sort of housing boom? No way.”
