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Price cuts at luxurious Hamptons estates

Sellers who hoped to get astronomical prices have agreed to multimillion-dollar price reductions to attract buyers.

Shoe designer Vince Camuto's Villa Maria estate in

Shoe designer Vince Camuto's Villa Maria estate in Water Mill sold for $49 million, down $51 million from the original price. Photo Credit: Jake Rajs

The waterfront Hamptons estate known as Villa Maria boasts 11 bedrooms, Carrara-marbled baths, arched windows overlooking formal gardens, a heated pool, tennis court, guesthouse — and a $51 million discount off its original price.

The 15-acre former convent in Water Mill, previously owned by the late shoe designer Vince Camuto, was listed in 2008 for $100 million. It sold last month for $49 million to two separate buyers; one paid $36 million for 11 acres, including the 20,000-square-foot main house on Mecox Bay, and the remaining land traded for $13 million, said a spokesman for Sotheby’s International Realty, which represented the buyer of the main house.

Other luxury properties also have gotten steep price cuts this year. On Monday, a 10,000-square-foot oceanfront home on 6 acres in East Hampton fetched a closed-sale price of $40 million, according to Sotheby's, which represented the seller. It was a markdown of $29 million from the 2016 asking price.

Lasata, the onetime childhood summer home of Jacqueline Kennedy Onassis, sold in January; a 7-acre piece of the East Hampton estate, including the 10-bedroom home, closed for $24 million, down about $15 million from its 2016 listing price, public records show.

The volatility of the stock market so far this year, the impact of the new federal tax law and concerns about rising interest rates and political turmoil in the United States and abroad, have prompted some buyers to exercise caution, brokers said.

“All the whiplash we’ve been going through . . . makes the high-end buyer pull back,” said Judi Desiderio, chief executive of Town & Country Real Estate in East Hampton. “We’re a luxury item. They don’t need to spend $20 million on a high-end home when they can rent it for $1 million.”

Hamptons estates are finding buyers — when they’re priced right. And brokers say a growing number of sellers are agreeing to multimillion-dollar markdowns off once-stratospheric highs so they can finally strike a deal.

"The market is very quick to tell you if you’ve priced [a home] correctly or not," said Frank Newbold, the Sotheby's associate broker who handled the sale of the $40 million estate in East Hampton. "If the market perceives the price as too high, people don’t jump in and make a low offer, they wait until the price comes down to a reasonable level." 

It’s a change from the heady days of 2014, when an East Hampton estate sold for $137 million, breaking national home price records. At that time, the median Hamptons home price was posting annual gains of as much as 26.5 percent, rising to $975,000 in the last three months of 2014, a report by Manhattan-based appraisal company Miller Samuel and brokerage Douglas Elliman shows.

With such dramatic gains not so long ago, “the market got away from some of the sellers in terms of their expectations about what their homes were worth,” said Martha Gundersen, an associate broker with Brown Harris Stevens in East Hampton.

In 2014, “I began to think there was no shame in overpricing your home — that was gone, just like there’s no shame in social media,” said Jonathan Miller, chief executive of Miller Samuel.

But for properties that have lingered for months or years without a sale, some sellers have grown more willing to meet buyers in the middle, he said.

“High-end sellers that have been stuck for several years with aspirationally priced listings are becoming much more negotiable, because they can see more listings coming in,” Miller said.

In some instances, the most eye-popping figures were “really an inflated price to begin with,” Desiderio said.

Unless buyers see a home as a good value, “no one’s pulling the trigger,” said Paul Brennan, an associate broker with Douglas Elliman in Bridgehampton. “You don’t know what your stocks are going to be worth tomorrow depending on what tweets are coming out today, and your world is up and down on that basis.”

This year’s federal tax overhaul also could be playing a role, as luxury home sellers and buyers alike try to figure out what impact the changes will have on their bank accounts, brokers said. Tax rates have fallen, giving a boost to those with high incomes. However, homeowners face a new $10,000 cap on deductions for state and local taxes, limiting the tax benefits of homeownership.

In the Hamptons, luxury properties can come with annual tax bills of $150,000 to $200,000, Brennan said. “If you can only take $10,000 off that for your taxes, that’s quite a big difference,” he said.

Some luxury buyers are seeking out properties with somewhat lower taxes, in communities such as Sagaponack, said Diane Saatchi, an associate broker with Saunders & Associates in Southampton.

Others “are going to pull back a bit to wait and see how much of a positive effect the tax law has on them, and if it offsets the negative,” Desiderio said. “People are really trying to figure out, ‘How does this affect me?’ ”

Miller called the current economic conditions “a stew of uncertainty.”

Overall, Miller said, “buyers are just not budging on something that isn’t priced correctly.”

And it hasn’t helped that many weekends have been plagued by snowstorms, rain and unseasonably cold weather, keeping would-be buyers from venturing out in search of a summer home, Saatchi said.

Some current sellers of high-end homes are taking their cues from those who have discounted their homes and found buyers.

A 25-acre property in Wainscott known as Burnt Point, whose 18,000-square-foot home was designed by the late architect Francis Fleetwood and is situated on a private peninsula on Georgica Pond, is now listed for $59 million, a discount of $36 million from its 2015 listing price.

 

In Sag Harbor, former "Today" show anchor Matt Lauer has dropped the asking price for his 25-acre estate to $12.75 million, a cut of more than $6 million since it was listed in 2016. A waterfront home in the Southampton neighborhood of North Sea is listed for $11.95 million, down $2 million from its asking price four years ago, right after the Kardashian family chose it as a summer rental.

Hamptons homes are still not selling cheap, of course. The median price for luxury homes — that is, the top 10 percent of sales — was $6.6 million in the first three months of 2018, up 27.5 percent from the same period a year before, the Douglas Elliman report shows. Thirty-seven homes fetched prices of $5 million or more in the first quarter, up from 27 in the first three months of 2017.

That increase is due, in part, to sellers’ willingness to reduce their asking prices to reasonable levels, since now the deals are actually getting done, Miller said.

The Hamptons housing market also is benefiting from its close links to Wall Street, with stock market gains in recent years and bonuses spurring home sales, brokers and financial experts said.

“It usually all hinges on the bonus,” said Bob Strebel, CPA, a partner with Sabel & Oplinger in Southampton. “It was a big year last year, so I think the bonuses did well in spite of the fact that there was a downturn in the market in January.”

The average financial industry bonus increased by 17 percent to more than $184,000, with a total bonus pool of $31.4 billion last year, a recent report by the New York State comptroller shows. Over the past 12 months, the S&P 500 stock market index is up by more than 10 percent.

“There’s a lot of money floating around, and people are spending,” said Susan Breitenbach, an associate broker with the Corcoran Group in Bridgehampton. But, she said, “they’re not doing emotional buying . . . they’re looking for value, they’re finding it and they’re buying it.”

 

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