April 25 (Bloomberg) -- Home sales in the Hamptons, the Long Island beach retreat for summering Manhattanites, rose 21 percent in the first quarter, led by lower-priced properties after a year-end selling rush drained the area of luxury deals.
There were 347 transactions in the three months ended March 31, up from 287 a year earlier, as buyers of less-costly homes jumped into a recovering market, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report today. The median sale price fell 5.1 percent to $740,000, reflecting a drop in deals for the most expensive homes.
An expected Jan. 1 jump in capital-gains taxes, part of the so-called fiscal cliff that ultimately was averted by a congressional agreement, prompted a surge in year-end luxury-property sales. In the fourth quarter, 49 Hamptons homes sold for at least $5 million, the most in at least six years. In the first three months of 2013, only eight such properties sold, the fewest since 2009’s first quarter, when sales of all types of Hamptons homes reached a record low.
“This was clearly related to the fiscal-cliff tax incentive to close before the end of the year,” Miller Samuel President Jonathan Miller said in an interview. Higher-priced “transactions were poached from the first quarter.”
The median price of all luxury properties, defined as the top 10 percent of sales by price, dropped 26 percent to $3.68 million in the first quarter. The most expensive home to trade hands was an oceanfront estate on Morrison Lane in Water Mill, which sold for $17 million, Miller said.
“You had a lower level of high-end activity, but we’re anticipating a more normal seasonal pattern” through midyear, he said.
Billionaire hedge-fund manager Steven A. Cohen agreed late last month to pay $60 million for a 10,000-square-foot (930-square-meter) oceanfront property in East Hampton, two people familiar with the matter said at the time. The sale of the home, on seven acres (2.8 hectares) with a tennis court and pool, wasn’t included in the first-quarter tally.
Homes of all price points are attracting buyers as New York City employment improves and international investors discover the eastern Long Island waterfront, Miller said. Wall Street executives, whose spending fuels the Hamptons market, last year received bonuses that were 8 percent higher than in 2011. Employees took home an average cash bonus of almost $121,900 as profits in the securities industry climbed threefold, New York state Comptroller Thomas DiNapoli said in February.
“If we didn’t have the fiscal cliff, we would have had an even bigger jump in sales,” Miller said.
The number of Hamptons homes listed for sale dropped to 1,437 in the first quarter, down 4.9 from a year earlier, Miller Samuel and Douglas Elliman said. The absorption rate, or time it would take to sell all homes on the market at the current sales pace, was 12.4 months, 22 percent faster than a year earlier.
“We’re starting to see the recovery taking hold, with prices slowly inching up,” said Gregory Heym, chief economist at brokerage Brown Harris Stevens, which also released a report on the Hamptons today.
The median price of homes of less than $1 million climbed 6.7 percent to $540,000 in the first quarter, the only category with an increase, Brown Harris said in its report. Homes in that price range made up 64 percent of all sales.
Bridgehampton was one of two Hamptons neighborhoods where the median price rose, according to Brown Harris. That market, where all transactions of more than $8 million took place, had a 29 percent median-price increase. In East Hampton, prices climbed 31 percent, the brokerage said.
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