Deed Analysis, November 24

Mar 29, 2012 11:54 AM

23 Pond Lane, Springs, $800,000 (Vacant)

79 Bishops Lane, Village of Southampton, $825,000 (Vacant)

These two properties are both half-acre vacant lots that sold for almost exactly the same price, at the same time.

23 Pond Lane is located in the Lion Head neighborhood of Springs, which, along Gardiner’s Bay, is far from the center of the Village of East Hampton.

The lot overlooks a cove near the bay. The nearby wetlands limit development.

The lot was sold with a permit from the New York State Health Department, which regulates the installation of septic systems, and plans for a 2,500-square-foot house and pool. Presumably, permits from the Town of East Hampton Zoning Board, and perhaps the New York State Department of Environmental Conservation are also necessary, due to nearby wetlands. It is unknown whether these permits have already been granted, but they can easily take a year to obtain.

79 Bishops Lane is much more straightforward. It is a simple rectangular lot, in the northwest corner of the Village of Southampton. It’s north of Hill Street but south of Route 27.

Prospective buyers faced with very different properties with similar prices often have trouble sorting through the range of factors that will affect future values.

Positive factors influencing 79 Bishop in Southampton are its location in a village, rather than an unincorporated area, its proximity to a village center and its relative proximity to Manhattan. Houses on Bishop Lane have generally sold in the past for less than $2.5 million.

23 Pond Lane in the Springs has none of these factors going for it, but it does have a water view. That is often the trade-off that Hamptons buyers find themselves facing—to stay close to town, or go all the way out to the bay for the same price.

In this case, for today at least, the market is telling us that both of these options are valued equally. There’s no hard-and-fast rule to solve the close-to-town versus far-out-on-the-bay quandary. But all buyers when evaluating different properties would be wise to write out a list of factors and see how they stack up.

My best guess is that if the economy gets better, a house on the water might be worth more, as waterfront homes, even without great views, can command a premium when times are good. But if the economy contracts, the market will fall furthest for houses that are far from town. Staying close to a village center is a good defensive proposition.