Ultra-expensive houses drag down East End closing prices

Fewer ultra-expensive homes were sold on the East End this summer, according to a new report on third-quarter activity released Thursday.

And that contributed to a 19 percent drop in the median closing price of homes in the Hamptons and North Fork to $625,000 during the third quarter of the year, while the median price grew by 5 percent to $377,250 for the rest of the Island.

Home sales slumped from the spring to summer, dropping by 19 percent in the Hamptons and North Fork and 26 percent on the rest of Long Island, said the report, commissioned by Prudential Douglas Elliman Real Estate and compiled by the Miller Samuel appraisal firm in Manhattan.

Jonathan Miller, head of the appraisal firm, said the overall sales drop stems from the cyclical nature of the house buying market and the rush to close before the federal home buyers tax credit was originally set to expire April 30.

But the double-digit fall in median closing price for the Hamptons/North Fork was an "anomaly," Miller said. The median was the second lowest for the Hamptons and North Fork since Wall Street imploded in fall 2008, partly because there were far fewer sales in the ultra-expensive sphere, he said. Sales of ultra-expensive homes, those worth about $5 million or more, fell 19 percent from the second to third quarter, data showed.

"I think the release of pent-up demand has been absorbed . . . where people were coming in and taking advantage of 30 percent discounts off peak," Miller said.

The home sales activity showed the uncertainty over Wall Street bonuses and the economy, said Dottie Herman, Prudential's president and chief executive.