If you really want to know how the housing market in the Hamptons is faring as summer beckons, Steven Gaines suggests an unusual yardstick.
He says the best barometer of how people in the Hamptons are doing is the price of the lobster salad at the local gourmet shop in nearby Sagaponack. Right now, it’s US$100 a pound. “When you’re spending US$100 a pound for lobster salad, what’s US$15 million for a home?” says Gaines, a local author and aficionado of all things Hamptons.
With Wall Street booming and stock markets hitting record highs nearly every day, the real estate trade in the Hamptons could not be better. And money appears to be no object.
Houses are routinely selling for US$10 million to US$15 million, and people do not think twice about shelling out US$200,000 for a 3-month summer rental.
It was reported that financier Ron Baron paid more than US$100 million for a 40-acre East Hampton property – no home, just land — located next to his sprawling estate.
“The houses in the US$10-US$20 million range are selling very well, which, of course, reflects the boom on Wall Street,” said Gaines, who hosts a radio program on Hamptons culture every Sunday from the lobby of the American Hotel in Sag Harbor.
Going back nearly a century, the Hamptons has traditionally welcomed the rich and famous from near and far. Pristine sandy beaches and bucolic country roads have been a haven for the blue bloods and the wannabes alike, all willing to plunk down parts of their fortunes on Hamptons palaces, big and small.
Judi Desiderio, president of Town & Country Real Estate, estimates 75 percent of her customer base comes from Manhattan power brokers. “As long as the economy in the city and on Wall Street is doing well, our high-end market is also doing well,” she said.
While the national real estate market has been described as “soft,” the same does not hold true for Manhattan or the Hamptons, says Stuart Epstein, the owner of Devlin-McNiff Real Estate.
That cash inevitably tumbles into the Hamptons as people start flocking to the beach and boarding the sailboats and yachts this weekend. Desiderio said many potential buyers remained on the sidelines the past year or so, but with the Dow soaring to record highs this spring, sales are beginning to sizzle.
Epstein said the majority of the houses this summer are renting for between US$50,000 and US$200,000. For that, you are likely to get a 4,500 square-foot home, with plenty of amenities, including a swimming pool.
Some fancier houses have rented for as much as US$750,000 or US$800,000, but those are the exceptions. (For the record, an US$800,000 3-month rental comes out to about US$8,000 per day.
When prices climb that high, many people opt to buy rather than rent, brokers said.