Prices for luxury homes in the Hamptons rise to record levels despite slow sales

There has been a surge in luxury-home prices in New York's Hamptons over the past few months, setting new records in the process.

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A Miller Samuel Inc. appraiser and Douglas Elliman Real Estate brokerage reported that the median price of sales in the top 10% of the market in the last year was $8.54 million, an increase of 11% over the same year. In addition to setting a record price at $16.1 million, the average price of high-end homes on Long Island beach towns rose by 33% due to the fact that a few very large purchases pushed the price up by 33%. 

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It is said by Todd Bourgard, Elliman's chief executive officer for Long Island, that the demand for luxury homes is "very strong." At the moment, there are more buyers than there are inventory available, which is why when something that is priced reasonably for the luxury market comes on the market, we get a lot of interest from buyers. 

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Despite this, luxury transactions in the quarter declined from 40 to 18, a 57% decrease from the year before. Hamptons deals fell across all price ranges 57% to 171. During the first quarter of 2009, there were only 145 closings in the Hamptons, which marked the second-lowest total since the firms started tracking sales in 2005.

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There are a variety of variables floating around at the moment, including mortgage rates, economic uncertainty, whether we will enter into a recession, all of which will contribute to the overall decline in sales activity, according to Jonathan Miller, president of Miller Samuel.

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Long Island's South Fork, which includes Amagansett, Montauk, and Southampton, has also experienced a shortage of listings that has curtailed purchases, although there has been a recent improvement in inventory, though the difference is not as great as what real estate agents want or would like to see. 

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On the other hand, there have been a lot of buyers looking at the market, but they're frustrated by the lack of options on the market. A year ago, there were 894 homes available, a 33 percent increase from a year older, but still 54% lower than in the first quarter of 2020, before the pandemic.

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"I believe that if we had a spring like ours, where a good number of homes come on the market and are sold very quickly, we would see an increase in the number of sales right away," Bourgard said.

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There was a 2.9% drop in the median price of all sales, falling from $1.36 million to $1.36 million from a year earlier. But big luxury purchases included $1.08 million, 18% higher than in early 2022.

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In a pair of major off-market transactions, $77.8 million was spent for the acquisition of 32 Windmill Lane in East Hampton, which was part of a complex of two ocean front properties that sold jointly for $91.5 million in January by two separate parties. 

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Elliman agents Kyle Rosko and Marcy Braun also sold 51 West End Road in East Hampton for $35 million in January. After two price reductions from the $60 million asking price set in late 2021, the 1.5-acre (0.61-hectare) oceanfront property near Georgica Pond was sold for $60 million after a five-bedroom house built in 1926.

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Sales on Long Island's North Fork hit its lowest level since early 2009; the 77 transactions recorded were 33% fewer than the same period in 2021. The median price for the North Fork was $935,000, up 10% from the first quarter of 2022.