Home prices in New York’s Hamptons fell the most in almost three years as buyers in the beachfront towns sought out less-expensive properties and shunned the middle of the market, priced from $1 million to $5 million.
Homes in the area, a second-home mecca favored by Wall Street executives, sold for a median of $825,000 in the third quarter, down 13 percent from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest annual decline since the fourth quarter of 2013.
Buyers in the towns and hamlets on Long Island’s South Fork are setting their sights lower as yearly bonuses for New York City’s financial employees — the lifeblood of the Hamptons market — are poised to disappoint in 2016. Incentive pay at hedge funds may fall 5 percent to 15 percent this year because of lackluster returns, while bonuses for fixed-income sales and trading may fall 10 to 15 percent, according to an August report by compensation consultant Johnson Associates Inc.
“Wall Street is not having a banner year and I don’t think there’s an expectation that compensation for this year will be higher than last year,” Jonathan Miller, president of Miller Samuel, said in an interview. “I do think there’s just a little bit more caution.”
Purchases of Hamptons homes priced at less than $1 million jumped 22 percent from a year earlier to 306 deals, according to the report. Properties in that tier accounted for 59 percent of all Hamptons deals in the quarter, the biggest share since the end of 2013.
Sales of homes priced at $1 million to $5 million, what Miller called the middle of the market, fell 24 percent to 171. There was some pickup on the high end, with 40 transactions for more than $5 million, up from 31 a year earlier.
More Transactions
Across all price ranges in the Hamptons, sales climbed 2 percent to 517. It was the first annual increase in transactions since the second quarter of 2015, and the total surpassed the 10-year quarterly average of 454 deals, according to Miller.
“When the dust settles, the market looks pretty good,” he said. “Just the fact that there was more activity than there was a year ago says a lot.”
Two other reports on the Hamptons market released Thursday also cited a decline in the median price and a high number of sales in the less-expensive tiers. Brokerage Brown Harris Stevens said the median price fell 13 percent from a year earlier to $850,000, and that deals for less than $2 million accounted for 79 percent of all purchases in the quarter. Corcoran Group reported a median price of $900,000, an 8 percent decline.
“The entry-level, lower-priced properties sold more,” Ernest Cervi, a senior vice president at Corcoran Group who oversees the brokerage’s Hamptons sales, said in an interview. “We saw a definite increase.”
Montauk had the biggest jump in sales in the third quarter, with the number of deals climbing 83 percent from a year earlier to 33, Corcoran Group said in its report. The median price of those transactions slipped 3 percent to $1.09 million.
In the East Hampton and Wainscott areas, there were 118 sales in the quarter, or 9 percent more than a year earlier. The median price was $850,000, a 4 percent decline.
This article was provided by Bloomberg News.
