The second-quarter reports for the Hamptons housing market were packed with good news for sellers.
Inventory is down, demand is up — and prices are up, according to a survey of reports from Douglas Elliman Real Estate, Brown Harris Stevens and The Corcoran Group. Each real estate firm uses its own methodology, but the trendlines all pointed toward the same conclusion: The market is strong with demand outpacing inventory even though the frenzy of activity seen last summer amid pandemic fears and the New York State shutdown has stabilized.
The Brown Harris Stevens Report found the highest average sales price and highest median sales price ever reported, at $3 million and $1.85 million, respectively. The report notes that the spread of the Delta variant, the reopening of travel destinations and the return to in-person school and work environments will influence what happens going forward.
Robert Nelson, the executive managing director of Brown Harris Stevens of the Hamptons, said the second-quarter report reflects sales that had entered contract during the first quarter, and that level of activity continued throughout the whole first half of the year.
Buyers are not panicked, he said, but what’s emerged is a stable, healthy market. What he continues to see a lot of is individual houses receiving multiple offers from buyers.
“Every time there’s a multiple, you have five, six, seven people that didn’t get it, and they’re still in the market looking for that house,” Mr. Nelson said.
He said that if a property comes onto the market correctly priced, there will be multiple offers, while the overpriced properties won’t receive any offers. “I’ve done this for 37 years, and it’s always that case,” he added. “But now it’s so evident because there are multiple people looking for the same home at the same price point.”
An experienced broker will look at active, pending and sold comparable properties to determine the correct listing price, he said.
Brown Harris Stevens found that there were 708 sales in the second quarter of 2021, which beat out the previous three second quarters.
In the second quarter of 2017, there were slightly more sales, at 721. However, even though the second quarter of 2017 saw more houses change hands, the second quarter of 2021 saw more money change hands. Total sales volume for the second quarter leapt from $1.36 billion in 2017 to $2.13 billion in 2021.
Mr. Nelson said it seems that back in 2017 there were many properties selling for under $1 million, while today properties for less than $1 million don’t exist.
While a layperson might see that sales under $1 million are fewer and conclude that people aren’t buying homes at the lower end, the reality is that there is no lower end, he explained. “Those homes are few and far between now,” he said. “They’ve all been purchased.”
With the New York State foreclosure moratorium scheduled to end August 31, Mr. Nelson doesn’t anticipate a bad effect on the housing market. Many owners either paid all cash or only took a mortgage because the interest rates were so favorable, he said. “If someone truly was at a loss, they could just list it and sell it and get out,” he pointed out.
The Elliman Report found that listing inventory is at its third-lowest level in nearly 15 years, and the market’s pace is the fastest it’s been in 15 years. Occurrences of bidding wars rose annually to their second-highest rate in the five years that indicator has been tracked.
“This has been 17 months of an incredibly strong continuous market, and our agents are doing such an incredible job getting people in these homes and getting new homes on the market,” said Todd Bourgard, Douglas Elliman’s senior executive regional manager of sales for the Hamptons.
At the end of the second quarter, 1,039 single-family homes were on the market, a 42 percent decline from the year prior, the Elliman Report states. Meanwhile, the listing discount — the difference between the last asking price and the final sales prices — reduced from 13 percent to 6.3 percent.
These days, just through word of mouth, some homes get three or four offers before they have even hit the market, Mr. Bourgard said. “We’re still finding ourselves in multiple-offer situations at all the price points.”
He noted that Douglas Elliman has closed more dollar sales volume in 2021 so far than it has for all of 2019 — almost $500 million more. “To be above and beyond that already, halfway through, is a real indicator of what’s going on out here,” he said.
People who have rented in the Hamptons before and know what it has to offer are now realizing that they can live out here and work from home, according to Mr. Bourgard.
“The quality of life is what’s bringing them out here,” he said. “It’s a beautiful place. Why should we just use it a few months a year? This is a beautiful place 12 months a year.”
Restaurants and retail are busy, gyms are full and contractors are working, he said. “I see this as a huge plus for the economy on the East End.”
He attributes the median sales price — $1.5 million for a single-family home, according to the Elliman Report — to very low inventory, high consumer demand and very low mortgage interest rates.
While the market has calmed, he sees no slowdown. There are still many buyers eager to make a purchase, as indicated by the number of multiple bids there are on homes, he said.
As far as new inventory goes, Mr. Bourgard said some Hamptons homeowners who wish to upgrade locally are hesitant to put their homes up on the market because their options for a new home are limited.
There are starter homes to be had for local year-rounders, according to Mr. Bourgard, who said the buyers just need to be ready to move as soon as the home comes on the market. “It’s not like you can go out and view 15 homes anymore,” he advised. “If something good comes on the market, and you like it, you have to make that move. And those are still available because interest rates are still very low. So that really helps the costs.”
Houses are moving as soon as they come on the market because agents are pricing the homes properly, he said. “When they do that, they sell, and in this kind of market, they sell quickly.” In many instances, the house will even get above the asking price, he added.
Ernest Cervi, the regional senior vice president for the East End at The Corcoran Group, said this is the seventh quarter in a row that sales increased year-over-year on the East End.
“At this point, the only thing slowing down the market is our very limited inventory,” he said. “As we all know, the summer season is really when the Hamptons shine and discerning buyers are proving that they are willing to pay for their piece of the East End lifestyle.”
