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Jonathan Miller,
The Hamptons real estate market in the fourth quarter of 2020 was defined by “a record number of records,” according to Jonathan Miller, the president and CEO of Miller Samuel Real Estate Appraisers & Consultants in Manhattan.
Mr. Miller is the author of The Elliman Report, a series of quarterly real estate market reports for regions in seven states, including the Hamptons and the North Fork in New York. He is one of the closest watchers of the East End markets, and an experienced analyst of changing trends.
In a recent interview, Mr. Miller expressed that the fourth quarter in the Hamptons beat expectations, which had been high.
“We expected an uptick above the third-quarter levels, but this went well beyond that,” he said. “I think the most important metric, from our perspective, in terms of how the market’s performing, was relating to physical transactions. That sales activity essentially doubled year-over-year to the most fourth-quarter transactions — at 803 — that we’ve tracked.”
His Hamptons data goes back to the first quarter of 2005, he noted, so he can say the fourth quarter of 2020 had the most sales in a single quarter for the past 16 years, at a minimum.
The sales boom is also showing in the inventory of homes for sale declining and the absorption rate speeding up.
“While it is not as depleted as we see in Long Island itself, where inventory is at 18-year lows, we are seeing inventory contract and the pace of the market move much faster than it did a year ago,” Mr. Miller said of the Hamptons market. “So the report showed, year-over-year, that inventory is down about 9.1 percent.”
That doesn’t put inventory at a record low, but it’s on the low side, he added.
“The actual pace of the market, which is the metric I call ‘months of supply’ — which is the number of months it would take to sell all the listing inventory at the current rate of sales — is six and a half months. That is not a record, but it’s flirting with a record.”
A year prior to the last quarter of 2020, the rate was 14.4 months.
One of the most telling metrics is how many houses sell for more than their asking price, Mr. Miller said. It reached a record of 19.1 percent, or nearly one out of every five homes sold.
That is the highest it’s been since he began tracking that metric in the second quarter of 2016, he said, adding that the average percentage of homes selling for above their asking price had been 8.1 percent for the last five years.
“That just shows you it’s more than double what the recent norm has been, which just shows you the intensity of the market,” he said.
He also found that the percentage of sales for prices of more than $1 million reached a record of 52 percent.
The median sales price for single-family homes and condos combined rose to $1.4 million, a 55 percent increase in a year. Mr. Miller pointed out that home prices themselves did not rise by that much. Rather, it had to do with what kinds of homes were selling most frequently. “We really had a skew toward higher-end properties that sold,” he said, adding that the most active growth in sales activity was between $1 million and $5 million, where the number of units sold tripled.
Mr. Miller attributed the performance of the million-plus market to outbound migration from Manhattan and the “co-primary” concept — the idea that a Hamptons house could also be a primary residence, rather than a “second home” or vacation home.
The perception of a Hamptons home has shifted, he explained. Rather than a place to stay for the summer and weekends, it can be a place to stay at any point of the year for an extended period of time.
Mr. Miller anticipates that vaccines will put the “V” into a “V-shaped recovery” of the economy.
The direction of the Hamptons market in the next year and beyond is at the mercy of when COVID vaccines are widely distributed and when companies start to call their employees back to Manhattan, he said, though he added that he is not suggesting that everything will go back to the way it was pre-pandemic.
“Zoom remains” and the new relationship between home and work remains, he said. “That’s why I don’t think this intensity is sustainable, but I don’t think it’s a fluke either. I do think that with the ability to work virtually, that really is the residual after all this is said and done”
The pace of the market and the dramatic shift to higher-priced housing stock that has sold has been a reaction to “the pandemic, the lockdown, the release of pent-up demand, the significant drop in mortgage rates and Zoom,” he said.
“So the question will be, well, how long does this continue? The problem with coming up with a credible answer for that is: There are so many variables in play. It is safe to assume the, essentially, rocketship trajectory of sales and price trends is not sustainable. However, the ending of these trends does not mean the market is weak or will be negative anytime soon. It just means that this trajectory — it seems unlikely that it will continue throughout 2021.”
