Hamptons rental scene seems healthier this year

The Hamptons rental market learned a lesson from last year, when renters sensed "blood in the water," in the words of one landlord, and stayed away when they couldn't find bargains.

This time, Hamptons owners haven't asked for through-the-roof prices, and potential renters aren't bidding so low, said players in the rental scene. Deals on some of the 7,500 listings are coming to life early in the season - instead of late, as they did last year, they said.

"It's not the bargain mentality of 'I'll just wait until the end and there'll be a lot of bargains,' " said Jonathan Lerner, managing director of Engel & Völkers real estate firm in Southampton. "It's also a combination of owners being realistic too . . . They're willing to accept an offer early instead of trying to squeeze every last dollar out of it."

A year ago, landlords slashed prices by up to 25 percent - a few even agreeing to half-off list price, agents said. But the rental supply was high, built up with houses that became summer rentals when their owners couldn't sell them. On top of that, financial sector workers and others who used to rent entire houses were banding together to save money.

As many as 40 percent of rentals gathered dust for much of the last season, estimated Tony Cerio, an associate broker at the East Hampton office of Brown Harris Stevens, one of the big firms.

Cerio said he has 10 rental agreements so far, compared to four a year ago.

Now, renters are hopping on deals in which the rents are 10 percent to 15 percent down from last year, real estate veterans said.

Manhattanite Josh Bailer visited about 10 places and got a lease - all in one day this month - a big change from last year, when he signed a deal shortly before Memorial Day because prices had not reflected the magnitude of the recession.

"I found this to be the easiest of any negotiation that I had in the past," said Bailer, a summer renter for six years.

The $250,000-plus luxury rentals, which make up about 20 percent of the listings, are going fast, a sign that the Wall Street bonuses are trickling into the economy, agents said.

But the rental patterns might have been changed by the recession. For example, some renters are saving by booking June and July, instead of the Memorial Day to Labor Day, agents say. The number of people asking for short-term leases, from a week to a month, has grown significantly by most accounts, and landlords aren't scoffing like last year.

"There's a newness in our market right now, evidenced by things like the short-term rental phenomenon," said Joseph Kazickas, founder of Rosehip Partners real estate firm in East Hampton. "I'd say it's the new normal."

Some renters bargain, asking for two to six weeks to be "thrown in" for free, Cerio said: "The landlords are not objecting to it. They don't want to have another last year."

A veteran Hamptons landlord, developer and investor Philip Young said he's not worried about renting out three houses, in East Hampton, Wainscott and Sagaponack. After three bids on Wainscott, he agreed to $63,000, several thousand above what he got last year, when renters sensed "blood in the water."

The big stake is in his three-level Sagaponack mansion with ocean views. Last year, he got $180,000; now, he's hoping for $220,000 and says he thinks that taking short-term leases might make him more money. He's already booked a renter for two weeks in July at $50,000.

What's happening now as the Hamptons rental scene recovers might set the trend for future seasons, industry veterans said.

"People weren't prepared to spend $40,000 for the month of August, but maybe they would spend $15,000 for two weeks and call it vacation," Kazickas said. "It's a shift. Is it tectonic and permanent? I don't know."