This .4-acre property is located in the industrial corridor in East Hampton, in a residential neighborhood that is often used by trucks going to the recycling center and other nearby heavy commercial businesses. As a result, it offers some of the most affordable housing in town.
There is an ordinary 1,200-square-foot ranch house on the lot, built in 1980, that is not in particularly good condition.
The first recorded transfer of this property was in 1994, when it sold for $130,000. Two years later, in 1996, it sold for $155,000, a return typically associated with the best properties in the hottest markets.
The 1996 buyers sold to the current sellers in 2005 for a whopping $601,000! That’s $16.25 percent compounded annually, far higher than any ordinary investment typically ever appreciates.
In many instances today we are seeing homes trade locally at around 2005 prices (nationally many prices are at 2003 levels) following the deflation of the recent real estate bubble. But this sale, for $331,000, would place this property at roughly 2000 levels for this property, given that the transfers show an appreciation of roughly $50,000 per year from 1996 to 2005. 2000 prices are low by national and local standards, as well as in this neighborhood, where a ranch house down the street sold for a comparable price in 2002.
There are instances when a property’s value can fluctuate wildly, if a house is radically improved, or completely destroyed, or if a zoning revision or other external factors change the underlying value of the land. But wild roller-coaster changes in valuation are generally a red flag associated with the rapid inflation and deflation of real estate bubbles that can swing quickly, and much too far, in both directions.
211 Dune Road, Westhampton Beach, $5,800,000
This oceanfront house is one of the highest-priced sales of the year in Westhampton Beach.
The house, built in 1972, is 4,500 square feet, with six bedrooms. It is vaguely Caribbean in style, painted blue and white with wrap-around porches and a bar under an awning on the back.
Inside, the by-the-sea, nautical theme continues, with wood ceilings reminiscent of a boat deck, a large stone fireplace, and an open kitchen, dining and living area. There are excellent ocean views throughout and an oceanfront pool and walkway over the dunes to the beach, which are both hard to get permitted today.
The 1-acre lot is one of the very best in Westhampton Beach, between the bridges on Jessup’s Lane and Beach Lane, offering convenient access to the village center in both directions.
Assuming a $300 per square foot valuation, this home might cost around $1.4 million to construct today, plus another $400,000 for stone driveway, landscape, decks, porches, pool and walkway, for a total value of the around $1.8 million for the improvements. This implies that the lot, if vacant, would be worth around $4 million; but some of that value includes the right to maintain this big, oceanfront frame, the interior of which can be renovated without special permits, as well as the pre-existing pool and walkway.
27east on Dec 12, 2011