These homes are located in the Hampton Oaks subdivision in the Northwest Woods of East Hampton. The subdivision, which has two community tennis courts, consists of three streets with approximately 50 homes and was developed circa 1980. Most lots sit on approximately half an acre up to three quarters of an acre.
13 Diane Drive, which was built in 1988, is typical of many aging homes in Northwest. It is a contemporary saltbox, 2,000 square feet, with a double-height dining/kitchen/living room with fireplace, one bedroom downstairs and two bedrooms, which share a bath upstairs.
Depending on size, condition and location, homes here have been selling in the $600,000s in this market. Often they are located on half-acre lots, but because this house is on three quarters of an acre, has a pool and access to the community tennis courts, it sold in the high $600,000s.
21 Diane Drive, just down the street, is a 4,800-square-foot traditional home built on speculation in 2009. It contains six bedrooms, 5½ baths and a two-space attached garage. The large great room, paneled den, chef’s kitchen, coffered ceilings, double-height entry and baths with oversized tubs and glass enclosed showers are all attractive and typical of mid-range speculation houses. What makes this house unusual is its location. At almost $2 million, it appears to be the highest price ever paid for a home in this subdivision. Last year, a new modern home sold in the same neighborhood for $1.9 million.
While East Hampton has an extraordinary range of home values—from $400,000 to $40 million—it is very unusual for a home to sell in a sub-$1 million neighborhood for twice that value. Is it a good idea to own the most expensive house on the street?
Most real estate professionals will tell you that from an investment perspective it is best to own the least expensive house on a street, or, even better, raw land. This is because land has the potential to appreciate, while structures tend to depreciate in value as they age. In addition, raw land and small older homes have much lower taxes and maintenance costs than big new homes.
From a strictly financial perspective, 13 Diane Drive may be a better investment than 21 Diane Drive, although 21 Diane is a lovely home which offers far more to its owners than 13 Diane. Only time will tell if 21 Diane is an outlier (too expensive for its neighborhood) or ahead of its time and the first of many $2 million homes in Hampton Oaks.
These homes were built in the late 1970s. The Paul’s Lane house is a three-bedroom contemporary in the center of Bridgehampton south in a fairly busy location. The Baiting Hollow house is a gambrel-roofed barn-style traditional located in the Georgica neighborhood.
Both of these homes are tear-downs and two more examples of one of the strongest market sectors. Vacant land and tear-downs sold briskly throughout 2010 south of the highway and show no sign of stopping.
If accurately priced, these properties should sell quickly and easily because post-crash land values south of the highway are well established. Both are on 1-acre lots, and as these transfers and many others show, these lots tend to be worth around $3 million, sometimes $4 million, depending upon exact location.
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