The news is flooded with reports of a slowdown in luxury real estate, from Miami to New York City. Earlier this year, The National Association of Realtors reported that nationwide, existing-home sales were down 7.1%. The Commerce Department confirmed that while new-home sales rose in February, sales fell 18% in the Northeast, Midwest and South. Real estate agent Austin Hoffman of Douglas Elliman in New York City spoke to CNBC earlier this year and noted that anything under $3 million closed rather quickly on the market. However, for prices over $4 million, Mr. Hoffman reported prices leveling out and slowing down, with many price reductions and foreign buyers seeming to be less urgent. In Los Angeles, Aaron Kirman, President of Aaroe Estates at John Aaroe Group told CNBC that the high-end market there is performing well. Interest rates and inventory are still low in L.A., therefore, driving demand, but for homes $20 million and up, there has been a slowdown, as foreign buyers are more hesitant, especially with the uncertainty with the global markets.
However, the Hamptons real estate market – a playground for the uber wealthy – is proving to be different.
According to a Q1 Douglas Elliman report that was published in the beginning of 2016, the average price for a home in the Hamptons fell 21% to $1.9 million, compared to the fourth quarter of 2015. Cody Vichinsky, co-founder of Bespoke Real Estate, a firm that represents homes in the Hamptons $10 million and up, sat down with Scott Gamm of TheStreet and explained that “although there may be equity market volatility, I think ultimately it comes down to the individual — their liquidity situation and where they are in their life.” He referred to the many factors affecting one’s decision to buy a Hamptons home. “I’m actually quite confident that you’re going to see a rebound.”
Douglas Elliman’s recent Q2 report indicated that although sales prices are slightly down, there was a higher volume of sales, and homes were on the market for a shorter amount of time. For Bespoke, there is some softening seen in the lower price point properties, situated more inland in the Hamptons. But, regardless of the softening, according to a recent story published on Reuters, the overall Hamptons market remains solid. The article cites a recent report from Corcoran, inclusive of all fourth-quarter sales that states the median sales prices increased 3% to $1.1 million from last year. On the high-end, $20 million+ homes, the market continues to be strong. In Q2, Bespoke facilitated 41% of the waterfront sales from Southampton to East Hampton. The firm also facilitated ~30% of the transactions about $10 million from Southampton to East Hampton. “Most end-user property owners on the high-end in our market are insulated with highly liquid, thus, there is rarely an urgency to liquidate assets of this caliber,” Cody Vichinsky said.
A recent CNBC.com article suggests that the notion of market volatility does not apply for the super luxury market in the Hamptons. Though Wall Street turbulence may have an effect on homes in the lower prices points for the trophy, waterfront properties on the super high-end of the market, sales remain strong.