Home prices in the Hamptons, the Long Island beach towns that attract summering Manhattanites, surged 22 percent in the third quarter from a year earlier as demand climbed for the most expensive properties.
The median price of homes sold in the quarter increased to $850,000 from $696,000 in the same period last year, according to a report today from New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. The number of houses that sold for $5 million or more almost tripled in the Hamptons and North Fork areas on Long Island’s East End.
Luxury-home buyers helped bolster the market in a quarter that saw the Standard & Poor’s 500 Index fall 14 percent amid concern that the U.S. may enter another recession. Wealthier house hunters tend to view Hamptons homes as relatively safe investments, said Jonathan Miller, president of Miller Samuel.
“Despite all the economic turmoil, the high end of the market was extremely active,” he said in a telephone interview. “If you remove the high end of the market, I’d characterize prices as stable with a modest uptick in sales activity.”
Total Hamptons sales increased 12 percent to 398 homes, according to Miller Samuel and Prudential. In the North Fork, transactions climbed 22 percent to 140 properties.
Sales of Hamptons and North Fork luxury homes, defined as the top 10 percent by price, jumped 15 percent to 54 houses. Thirty homes sold for $5 million or more, the second-highest number of sales in that price bracket since the collapse of Lehman Brothers Holdings Inc. in September 2008, according to Miller. Eleven homes sold for $5 million or above a year ago.
The most expensive home that changed hands in the quarter was a seven-bedroom, 4,500-square-foot (418-square-meter) home in Sagaponack, which sold for $24 million in September, according to Miller.
A separate report by New York brokerage Brown Harris Stevens showed a 20 percent increase in the median Hamptons home price, to $905,000. That was fueled by a 45 percent jump in sales of properties priced at $2.5 million or more.
“People at the highest end aren’t as sensitive to the economic turmoil as people at the lower end of the market,” Gregory Heym, Brown Harris’s chief economist, said in a telephone interview. “As a secondary market, it took the Hamptons a lot longer to come back. So people are still finding good value out there and taking advantage of it.”
International buyers are helping to boost demand, according to Judi Desiderio, president of Town & Country Real Estate in the Hamptons. Her firm reported a 20 percent increase in the median sales price.
Foreign purchasers accounted for about 10 percent of Town & Country’s deals in the quarter, with buyers mostly from the United Kingdom, Russia and Germany, Desiderio said.
“Foreign interest has stimulated some of the Americans to pull the trigger, but it’s with trepidation,” she said.
The year-over-year sales gain may also have been boosted by comparisons to the third quarter of 2010, when sales weakened after the expiration of a federal tax credit for homebuyers, Miller said. The incentive required contracts be signed by April 30 and deals completed by the end of September.
Linda Miller, who put her two-bedroom waterfront cottage in Southampton up for sale in August 2010, said she is starting to see a pick-up in the market.
Miller, who is unrelated to Jonathan Miller, originally listed her home for $1.975 million. She switched brokers in August of this year and cut the asking price to $1.625 million. Since then, she’s seen an increase in interest in her property, which comes with a $30,000 boat.
“People have gotten used to the downturn in the economy and, for those who are able, I think people are realizing now is the time to go out and buy,” said Miller, 63, who owns a marketing agency. “It’s really a buyer’s market.”
East Hampton Village had the biggest gain in sales prices, according to the Town & Country report. The median jumped 155 percent to $4.85 million, based on seven transactions during the quarter. The median sales price in Southampton Village, where there were 14 sales, rose 43 percent to $2.55 million.
The area with the biggest drop in the median price was Shelter Island, with a 40 percent decline to $790,000. The median sales price in Westhampton fell almost 13 percent to $700,000.