Hamptons real estate prices surged 23% in the third quarter
This four-bedroom home in Sag Harbor recently sold for $2,160,000. Credit: Town & Country Real Estate
Local housing markets across the country have been battered by rising mortgage rates, but you wouldn’t know it by browsing transactions on Long Island’s East End from the third quarter.
The median home price among sales in the Hamptons was $1.6 million for deals that closed between July and September, which was 23.1% higher than in the same quarter a year ago. On the North Fork, the median reached a record $979,500, or 22.4% higher than the median a year ago, according to data from Douglas Elliman and Miller Samuel.
More sales above $5 million have helped drive up the median in the Hamptons, said Jonathan Miller, CEO of Miller Samuel. Deals above that threshold represented about 13% of all sales in the third quarter, which was the highest share since Miller began tracking the stat in 2006. A year ago, deals above $5 million represented about 11% of all sales.
“We have this continued shift, compared to pre-pandemic, of more high-end activity,” Miller said. “That has really been the story of the Hamptons since the beginning of the pandemic.”
What to know
- The median home price in the Hamptons and the North Fork in the third quarter each increased by more than 20% compared with the previous year.
- The number of sales fell in both regions, and inventory levels are well below pre-pandemic levels.
- Turbulence in the stock market could affect buyers' appetites for luxury homes going forward, one expert said.
Still, real estate firms specializing in East End sales say there aren’t enough homes available to satisfy buyers. Despite rising prices, there were just 333 sales in the Hamptons during the quarter, which was a 16.1% decline from the same period in 2021. It was the fewest homes sold in the region since the first quarter of 2019.
While there are a higher percentage of cash buyers out East who don’t plan to use a mortgage to finance their purchase, Hamptons buyers are still sensitive to rising interest rates, which affect their businesses and investments, said Judi Desiderio, CEO of Town & Country Real Estate. Town & Country has eight offices in the Hamptons and on the North Fork.
Meanwhile, a lousy year for the stock market can have just as big an effect on buyers, if not on their wallets then on their moods as they mull a major purchase, Desiderio said.
“We find that our sales blossom when the stock market blossoms,” she said. “Once the stock market started to do that whiplash thing and interest rates were going through the roof, people just took a pause.”
When sales decline, the supply of homes on the market typically expands. That didn't happen in the Hamptons. The number of listings at the end of September in the Hamptons, 1,049, was 3% fewer than at that time last year.
Few under $1 million
Finding something for below $1 million has become extremely challenging. Corcoran, which publishes its own market report on East End real estate, found that the number of sales for below $1 million dropped by 40% in the third quarter compared with the previous year.
That decline has more to do with a shortage of homes coming to market at that price, not a lack of interested buyers, said Ernie Cervi, Corcoran’s regional senior vice president for the East End. “If it existed, we would sell it for sure,” he said.
The firms publishing these market reports cautioned that the Sept. 8 cyberattack on Suffolk County’s computer systems may have had an effect on the data. While Miller said he felt confident the data he used to compile the report was reliable, any closings that were delayed because of the cyberattack won’t appear until data for the fourth quarter is released. That effect is magnified when analyzing East End real estate, where there are fewer transactions than in Suffolk County as a whole.
On the North Fork, declining sales helped increase the supply of homes on the market. There were 110 sales closed during the quarter, which was 42.1% fewer than during the third quarter of 2021. Available listings at the end of September increased by 29.8% year over year to 161.
That’s substantial growth — about double the number of homes that were on the market in the spring — but still far short of the number needed to satisfy buyers, Desiderio said.
“While that seems like a big jump the truth is they should have 400,” she said. “The sweet spot is 450 homes for sale on the North Fork, so we’re still severely low in inventory.”
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
