It’s the end of the world as we know it.
Ben Foldy, writing for the Financial Times, surely sent local real estate agents to the window ledges with his unnerving proclamation that home sales in the Hamptons are dropping. The median price has slipped below the $1 million mark.
The culprit: the general malaise of real estate nationwide, blamed by insiders on rising mortgage rates. The uncertainty is magnified in New York State, already burdened with high property taxes, which suffers further from the new federal tax laws that favor fiscally responsible states.
“Higher-end properties have been affected by the 2016 federal tax reform, which imposed new limits on the deductions of mortgage interest and state taxes — the latter a particular concern in high-tax New York,” Foldy wrote.
Worse, data suggests the trend downward isn’t going away in the short term. The inventory of homes listed at more than $4.25 million rose 36.5 percent year over year in the second quarter, according to Miller Samuel, the real estate appraisal and consulting company affiliated with Douglas Elliman. Sales in the luxury market were down 11.6 percent from last year’s level.
That usually means asking prices must fall before sales pick up.
The North Fork is Heating Up
The folks at Out East looked at East End home asking prices over the past year in order to determine the villages and hamlets that are “up and coming” right now. Some highlights below:
North Fork prices are climbing. While Montauk, on the South Fork, takes the top spot on our list of hamlets with the largest annual increase, the study found that four of 10 areas with the largest increase in price are on the North Fork.
Southold comes in right behind Montauk with a 43 percent price increase since last year. Still, the median asking price is considerably lower than the East End median of nearly $2 million.
The Cutchogue median asking price now sits at $949,000 up from $699,000 in 2017, an annual increase of 36 percent. East Marion didn’t fall far behind, with an annual increase of 30.3 percent.
The Out East study compared median asking prices from the past two years.
On the other hand, a recent study commissioned by Bloomberg’s concluded the Sag Harbor market is red-hot.
Bloomberg asked Zillow, the online real estate database company, to compile the most recent 12 months of data on median price per square foot in the aforementioned six major Long Island vacation destinations.
So, caveats in mind, here are Zillow’s findings and the brokers’ reactions. It might not unlock the secrets of Long Island’s beachfront properties, but it’s certainly a start.
The most expensive area from May 2017 to May 2018, according to Zillow, was Sag Harbor, which had an average median price per square foot of $1297. No. 2 on the list was Bridgehampton, with an average median price of $871 a square foot, followed by Southampton, at $706.
Fourth is Westhampton Beach ($684), fifth is Shelter Island ($548), and sixth is Hampton Bays ($388). Over the same period, the median price per square foot for all of Suffolk County, which comprises the entire East End of Long Island, was $338. The total for Nassau County, which covers the rest of Long Island, was $321.
The key thing to remember when looking at this data, brokers caution, is that it reflects what’s sold, rather than what’s for sale.