Trying To Buy In The East End Market Under $1 Million? Not So Fast

“Location, location, location”: This age-old adage has never rung truer than it does in the Hamptons right now.

With so many buyers looking for single-family homes out east, real estate agents are flooded with inquires for homes under $1 million — and if that weren’t a feat in itself, they also want to be east of the canal.

Not too long ago, $1 million could get you there. Pre-pandemic prices certainly wouldn’t buy a mansion, but perhaps a nice little cottage, or a slightly larger overhaul. But in today’s fast-moving and competitive market, meeting that request is borderline impossible, at best.

So, what is currently available east of the canal for $1 million or less? The answer is, very little. Local real estate agents agree that there is next to no inventory in this price range — and, if they do come on, there are often multiple offers and sell for well over asking.

Scanning the listings from Southampton to Montauk, only a handful of homes sit in this range — though most have offers on the table, or have already sold — among a sea of parcels of land. But once the cost of building is added, the price goes up accordingly. So it’s all relative, really.

While it’s hard to believe, this price point is now considered bottom of the market. According to a report by The Corcoran Group, fourth quarter sales on the South Fork were the second highest of those reported on record— the median house price in East Hampton Village seeing a 37-percent increase, year over year, followed by Water Mill at 25 percent. The median house price on the South Fork is now $1.6 million.

The uptick began at the start of the pandemic, as the exodus from New York brought out new buyers in droves in their escape to greener and more wide-open pastures. And, as such, even old, stale, overpriced listings that languished on the market for years were revived, selling for what was once thought to be a ridiculous price.

One such home at 273 Ferry Road in Sag Harbor sold in a matter of weeks after sitting on the market since 2014, according to Carol Sharks, a real estate salesperson with The Corcoran Group in Sag Harbor.

“The price was lowered several times until, eventually, going off the market in the fall of 2019; the last asking price was $1.04 million,” Sharks said. “Once COVID hit and prices started soaring, we put it back on the market for the original price from 2014 — $1.295 million — and it went into contract within a few weeks.”

If a buyer is patient, poised for battle and willing to spend some money renovating, they may still find a bargain, like the three-bedroom, two-bath home at 9 Clinton Avenue in Springs, listed at $968,000 with Sharks.

The half-acre property even has room for a pool, something many buyers are currently adding to their criteria — as seen by the seven inquiries that the home gets per day, she said, noting that she already has five offers.

“The interest on this property in the last few weeks has been incredible,” Sharks said.

At this time last year, many of the homes that were listed for under $1 million are now asking $1.25 million or more, according to Simon Harrison, owner of Harrison Realty in Sag Harbor. Bidding wars have proven to sellers that properties can demand a higher price point, which continues to drive property values upward.

A few months ago, a two-story farmhouse on Shelter Island entered the market at $999,000, but was then removed — and Harrison noted that if that same property listed again today, it could easily sell for $1.25 million, or more.

One home in particular is getting the most attention in Harrison’s office: A four bedroom, two bath at 155 Waterhole Road in East Hampton, with room for a pool, listed at just shy of $1.4 million. Another property — a three-bedroom, one-bath home at 18 Hillover Lane in Sag Harbor, asking $829,000 — is poised to be popular, too, he said.

“We had three of our brokers guide a sizeable crowd on the first day of showings,” Harrison said, “resulting in 12 offers.”

Rachael Hulse, a real estate agent with Coldwell Banker Reliable Real Estate in Southampton, said she does get listings at this price point, but they are becoming scarcer. A three-bedroom, two-bath home on just over an acre at 190 Longview Drive in Southampton recently sold for $840,000 — a slight dip from its $929,000 asking price.

“We are dealing with such scarcity of listings,” Hulse said.

By and large, the East End is home to a sellers’ market — one that no longer settles for complicated contingencies, convoluted financing and thorny terms that could botch a deal. They want good, clean sales, and they know they can get them, as evidenced by buyers shelling out millions of dollars for complete teardowns, just to get their foot in a highly sought-after door.

At this point, there is no telling where this market will lead. Right now, it seems there is no cap in sight.

“I could sell 50 more houses at a million bucks each,” Harrison said, “but I just don’t have them.”