Oct. 19 (Bloomberg) -- Home prices in the Hamptons, the Long Island beachside getaway for Wall Street financiers and celebrities, rose 4.7 percent in the third quarter amid a surge in sales of properties from $2 million to $5 million.

The median price increased to $900,000 from $860,000 a year earlier, according to Town & Country Real Estate. The number of sales in the $2 million-plus category rose 44 percent to 46 transactions in the period.

“Some of these areas corrected by 25 percent or more and that caused people to sit up and take notice,” said Judi Desiderio, president of Town & Country. “If you’re a guy that’s been out there looking at a house between $8 million to $10 million and all of a sudden you’re looking at the same house and it’s $2 million less, that kind of a correction I think made guys jump into the pool.”

The total number of sales fell 2.3 percent in the third quarter, with homes priced under $500,000 showing the biggest decline, at 22 percent. The figures demonstrate that the Hamptons are still experiencing the effects of a recession and crisis that drove New York City’s unemployment rate to 10.3 percent in August. Financial firms have reported more than $1.6 trillion in losses and asset writedowns tied to record defaults on home loans. Executives at those companies are a driving force in the Hamptons property market, Desiderio said.

The median sales price for a luxury home on Long Island’s East End dropped 9.4 percent in the second quarter from a year earlier to almost $4 million, according to New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate.

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.

Last Updated: October 19, 2009 12:56 EDT