July 23 (Bloomberg) -- Luxury home sales in the Hamptons, New York’s oceanside retreat for Wall Street and Hollywood luminaries, stalled in the second quarter as the number of unsold properties swelled and owners cut prices an average of 20 percent.

Only 37 houses and condominiums priced at more than $2.36 million sold in the Hamptons and on Long Island’s North Fork, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. Inventory jumped 46 percent. At the current sales pace it would take four years to sell all 584 luxury homes on the market.

“You have concerns about future layoffs and lower compensation,” Miller Samuel President Jonathan Miller said. “Unemployment needs to top out and begin to decline before you see renewed confidence in the second-home market.”

New York City’s unemployment rate climbed to 9.5 percent in June, the state Labor Department said July 16. Financial companies eliminated 33,300 jobs, or 7.1 percent of their workforce, in the 12 months ended in June as Wall Street losses and asset writedowns topped $1.5 trillion worldwide.

The median sales price for a luxury home on Long Island’s East End dropped 9.4 percent from a year earlier to almost $4 million, according to today’s survey by the Manhattan-based companies.

Bridgehampton for $68 Million

The most expensive Hamptons home now for sale is a $68 million, 60-acre compound in Bridgehampton that includes a 20,000-square-foot house with seven bedrooms, 12 baths and 14 gardens, according to real estate listing service StreetEasy.com. The price hasn’t been reduced since the original listing in October 2007.

“If they don’t have to sell, they won’t do it,” said Dottie Herman, president of Prudential Douglas Elliman.

High-end sellers who cut their price did so by an average of 20 percent in the second quarter compared with 5.6 percent a year ago. Deeper markdowns show a disconnection between buyer and seller.

“People who have cash are waiting,” Herman said. “They’re looking to buy something that was once $40 million at 15 or 20 and that’s not happening.”

The asking price for a 13,500-square-foot oceanfront home in Southampton Village with nine bedrooms, 11 bathrooms and a tennis court was reduced 25 percent in April to $60 million after sitting on the market for a year, according to StreetEasy.com. It still hasn’t sold.

50 Percent Off

Of properties currently listed for more than $2.5 million, the deepest price cut is on a renovated 7,800-square foot home in Water Mill, built in 1910, according to data compiled by Sofia Kim, vice president of research for Streeteasy.com. The house has nine bedrooms, seven bathrooms, a swimming pool and has been for sale since October 2007. The seller slashed the price 50 percent to $4.95 million.

“These homes went on sale at the height of the real estate market in late 2007 and early 2008 and so the prices reflect the economic climate of those times,” Kim said in an e-mail.

Sellers of those houses “agreed to price cuts perhaps a little too late,” she said.

Stalemates are beginning to break on less expensive properties, Herman said. Of 231 Hamptons sales across the price spectrum, 61 percent were for less than $1 million in the second quarter.

Rest of the Market

For the overall Hamptons market, the average listing discount was 16 percent compared with 9 percent a year earlier. The inventory of all homes climbed 14 percent, according to the Miller Samuel-Prudential report.

The median sale price for the overall market fell 21 percent to $770,000.

Prospective Hamptons buyers who own Manhattan property are being hit with falling values there, too. Manhattan apartment prices dropped last quarter for the first time since 2002, declining 18.5 percent from a year earlier, according to a July 2 report by Miller Samuel and Prudential.

“Manhattan could very well be a leading indicator” for the Hamptons, Miller said.

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

Last Updated: July 23, 2009 11:31 EDT