Fiscal fears hurt Hamptons housing market

In the first quarter of 2013, sales of In the first quarter of 2013, sales of expensive Hamptons homes, like these in East Hampton, fell, a new report says. Photo Credit: Hampton Pix, 2010

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In the first quarter, sales of expensive Hamptons homes fell off the fiscal cliff.

Fear of higher taxes in 2013 drove a flurry of high-end house sales in the Hamptons at the end of last year. That front-loading of sales slowed down the top of the market in the first three months this year, experts said Wednesday, citing data from a report scheduled to be released Thursday by broker Douglas Elliman Real Estate and prepared by appraisal firm Miller Samuel Inc.

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On the rest of Long Island -- excluding the Hamptons and North Fork -- housing inventory declined sharply in the quarter, according to the report. Houses listed for sale fell to 15,303 in the first quarter, down from 20,358 a year earlier, as homeowners wait to rebuild equity and see where prices head. Average prices rose in the first quarter to $435,082 from $415,243 a year earlier.

Hamptons houses sold for an average price of $1.2 million in the first quarter of 2013, down from $2.1 million in the previous quarter and $1.7 million a year earlier, the report said. The fall doesn't signal a decline in prices so much as a shift in timing, said Jonathan Miller, president and chief executive of Miller Samuel.

Buyers, Miller said, tried to close "by Dec. 31 because the general assumption was a tax environment would be higher in 2013."

Miller said 49 houses in the Hamptons sold for more than $5 million in the fourth quarter but only eight in the first quarter.

The so-called "fiscal cliff" threatened a mix of automatic tax hikes and spending cuts in 2013. Congress agreed to limit the tax hikes while increasing rates on the highest earners -- those likeliest to be worried about capital gains on the sale of multimillion-dollar homes.

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While the average price in the Hamptons swung, the median price was more stable, falling to $740,000, a 5.1 percent drop compared with a year earlier.

"The top end of the market has taken a breather," said Douglas Elliman broker Paul Brennan. "Other than that everything is pretty normal."

Judi Desiderio, chief executive of Town & Country Real Estate, which publishes its own market reports, agreed that sales in the high end fell in the first quarter. "The greatest gain in activity was seen in the $2 million to $3.5 million range, it went up 41 percent," Desiderio said. "That's huge."

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