East Hampton real estate bubble won't burst anytime soon
Fred Thiele Jr. (I-Sag Harbor), NY Assembly member and Chair of Committee on Local Governments on Nov. 22, 2019 in Manhattan. Credit: Craig Ruttle
Evidence that the East End has become a coronavirus refuge for New York City residents is voluminous – from a sharp increase in post office changes of address from the city to the North and South forks, to surges in power usage, to swelling enrollments in public and private schools out East, including the Tony Ross School in East Hampton and a new East Hampton branch of a Chelsea-based private school called Avenues Studio Hamptons.
Now add this: A huge spike in revenue raised from a 2% tax on East End real estate sales. The Peconic Bay Community Preservation Fund reported revenue of $60.1 million through the first seven months of 2020, the highest figure ever for that period in the 22-year-old program’s history. It also was 30.6% better than last year, a relatively lackluster year because of the new federal income tax cap on the deductibility of state and local taxes. The market strengthened in the first three months of this year and surged when the pandemic hit hard in March, driving city dwellers to look for places to escape.
“From talking to real estate brokers and real estate attorneys, it would appear that for the second half of the year we ain’t seen nothing yet, the number of deals in the works dwarf what we’ve seen so far,” State Assemb. Fred Thiele of Sag Harbor told The Point. “If it’s a bubble, it’s not a bubble that’s going to disappear, at least not in the next few months.”
The towns with the biggest increases were, predictably, Southampton, East Hampton and Riverhead, which saw CPF revenues spike by 39.7%, 27.1% and 35.6%, respectively.
Thiele said this hot Hamptons real estate market is different from past ones, in that more of these buyers are looking to be full-time residents.
“I don’t think any of us have a full appreciation of what the full impacts will be until we go through it once,” Thiele said. “We’re actually witnessing a change in human behavior before our very eyes because of this pandemic. We’ll need more infrastructure, traffic patterns will be different, school impacts will be different...Once we get to Labor Day, I tell people, no Tumbleweed Tuesday this year.”
Michael Dobie is a member of the Newsday editorial board.
