Home sales in the Hamptons, Wall Street’s summer retreat, fell 22 percent in the first quarter after snowfalls hampered buyer interest and sellers made deals late last year in anticipation of higher capital gains taxes.
Transactions in the Long Island, New York, beachside towns plunged to 309 from 396 a year earlier, New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The 22 percent year-over-year drop was the largest since the second quarter of 2009, Jonathan Miller, president of Miller Samuel, said in an interview.
The slump probably had more to do with poor weather keeping Manhattan buyers away from the market than a plunge in demand, said Miller and Gregory Heym of brokerage Brown Harris Stevens. Between December and March 31, 61.9 inches (157 centimeters) of snow fell in Central Park, making for the third-snowiest season on record, according to the National Weather Service. In Islip, New York, about 60 miles (97 kilometers) west of East Hampton, the snow total was 55.3 inches.
“With so many buyers coming from Manhattan it would have been difficult to get out there to close transactions,” said Heym, chief economist at Brown Harris, which also released a report on the Hamptons today. “How do you get from Manhattan to East Hampton when you have a foot of snow?”
Drop in Prices
The median price of homes that sold in the quarter fell 23 percent to $699,000, as fewer properties changed hands in every geographic area on the South Fork of Long Island, according to Miller Samuel and Prudential. In the North Fork, an area of vineyards and beaches across the Peconic Bay, prices fell 16 percent to $432,500 as sales declined 22 percent.
“To me that suggests some sort of consistent external phenomenon and that phenomenon might be the weather,” Miller said. “This is a one-quarter anomaly and the spring market will see a continuation of where we left off” last quarter, he said.
There were 403 purchases in the final three months of 2010, Miller Samuel and Prudential data show. Year-end closings may have robbed transactions from the first quarter as sellers rushed to complete deals on concern that capital gains taxes for top earners would rise on Jan. 1, according to Heym.
“It pushed up a lot of high-end buying,” he said.
In the first quarter, 38 percent of all Hamptons home sales were for $1 million or more, according to the Brown Harris Stevens report. A year earlier, 50 percent of sales were for properties above that price.
$17.5 Million Sale
The most expensive home to sell in the first quarter was a $17.5 million, eight-bedroom, eight-bath property on Ocean Road in Bridgehampton, Heym said. It was the only sale of more than $8 million, compared with 12 sales higher than that price range in the fourth quarter, he said.
President Barack Obama agreed in December to extend Bush administration tax cuts for two years, keeping the capital gains rate the same.
Roland Chemtob put his four-bedroom East Hampton home up for sale in December for $2.99 million, betting on a surging spring market after he declined to sell last May for $2.35 million.
Snowy weather did damp customer traffic through the four- bedroom home on Horse Meadow Lane, with an art gallery and private nightclub in the basement, he said.
“Things were not as frenetic as they were supposed to be,” Chemtob said in an interview.
Missing the Mark
Chemtob, a part-time developer and start-up investor of companies including recordmycalls.com, got three offers for his home. They were close to what he was asking, ’’but they didn’t hit the mark,’’ he said.
By February, Chemtob rented out the property for the summer. He hopes to be able to sell it for his price later this year, as some seasonal renters might seek to become owners in the Hamptons, he said.
“I’m being a bit stickier to my number,” he said. “I think June, July, August, September are going to be very interesting, strong sales months.”
Four reports issued this week showed declines in sales activity and closing prices in the Hamptons. Town & Country Real Estate said sales fell 26 percent, with 215 properties changing hands. It reported a 30 percent decline in the median price.
The Corcoran Group said sales dropped 23 percent to 360 deals across the 10 hamlets and towns that make up the Hamptons. The median price of those deals fell 9 percent to $868,000.
Buyers “seemed to go for less-expensive homes,” said Judi Desiderio, president of Town & Country, a Hamptons brokerage. “Maybe they would have been looking for a $5 million house and they’re buying a $2 million to $3 million house.”
The number of homes listed for sale in the Hamptons climbed 3 percent in the first quarter to 1,689, according to Miller Samuel and Prudential. The listing discount, or the amount subtracted from the asking price to strike a deal, fell to 11 percent from 12 percent a year earlier.
At the current pace of sales, it would take more than a year to sell all of the properties on the market.
Of the 12 towns and villages tracked by Town & Country, three had increases in sales from a year earlier. Sag Harbor saw sales jump 56 percent to 14 deals, with the median price of those transactions more than doubling to $1.59 million. Montauk had one more sale this quarter than a year ago, with a total of 15 properties changing hands. The median sale price in Montauk slipped 10 percent to $700,000, according to Town & Country.
In East Hampton Village, sales fell 65 percent to six homes. Bridgehampton transactions decreased 46 percent, with 19 properties trading hands in the quarter.
To contact the editor responsible for this story: Kara Wetzel at email@example.com