Hamptons Average Home Price Hits Record on Luxury Surge
Home prices in New York’s Hamptons, the resort towns on the Long Island coast, rose to the highest on record as deals at the upper end of the market surged before expected tax increases for sellers.
The average price of homes that sold in the fourth quarter jumped 35 percent from a year earlier to $2.13 million, the highest since Miller Samuel Inc. begin tracking Hamptons sales in 1999, the appraiser said today in a report with brokerage Douglas Elliman Real Estate. It was only the second three-month period that the average purchase price topped $2 million, said Jonathan Miller, the New York-based firm’s president.
“There’s clear evidence of this year-end rush in anticipation of higher taxes,” Miller said in an interview. “We just had a lot of sales at the upper end of the market because the more affluent were more likely to be proactive.”
There were 49 sales in the quarter for more than $5 million, the most since 2006, when Miller Samuel began tracking that data. The quarterly average for the past six years is 23 such deals, Miller said. High earners were expecting to see their tax burden rise as Congress negotiated a budget deal into the new year. The top rate on dividends and capital gains climbed on Jan. 1 to 23.8 percent from 15 percent, including a 3.8 percent tax from the 2010 health-care law.
The median price for all luxury transactions, the top 10 percent of all sales by price, climbed 17 percent from a year earlier to $7 million, Miller Samuel and Douglas Elliman said.
“December was, like, crazy here,” said Judi Desiderio, president of Town & Country Real Estate in the Hamptons, which released a report on the market on Jan 18. The year “was like a snowball rolling downhill.”
The dollar volume of homes that changed hands in the fourth quarter surged 51 percent from a year earlier to $771 million, according to Town & Country. The median sale price rose 19 percent to $975,000.
Among deals in the quarter was one by Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein, who bought a seven-bedroom home in Bridgehampton that was listed for $32.5 million. The Ocean Road property includes a tennis court, pool, “sculpted gardens” and “a winding driveway to a home of which dreams are made,” according to a June 2009 rental listing on StreetEasy.com, a real estate website.
The sellers were Matthew Mallow, general counsel at BlackRock Inc. (BLK), and his wife, Ellen Chesler, a senior fellow at the Roosevelt Institute. Blankfein, 58, took title to the home in the fourth quarter, a person with knowledge of the deal said on Dec. 7. The sale price hasn’t yet reached public records.
Also in the quarter, an eight-bedroom oceanfront home on East Hampton’s Drew Lane sold for $24.7 million. The 7,000- square-foot (650-square-meter) “European villa” sits atop a dune, according to the listing on Zillow.com. The owners sought $40 million for the property in April 2010, the website shows.
Two additional reports on the Hamptons market today also show jumps in luxury-home purchases in the fourth quarter. New York brokerage Brown Harris Stevens said completed deals for at least $2.5 million surged 98 percent from a year earlier. The median sale price rose 16 percent to $975,000.
The Corcoran Group said the median price climbed 7 percent to $900,000. Prices for vacant land slipped 3 percent to a median of $575,000, according to the brokerage’s report.
The inventory of available homes for sale in the Hamptons plunged 12 percent to 1,023, the lowest in the six years that Miller Samuel has been tracking that data. The absorption rate, or the amount of time it would take to sell all the properties at the current pace of sales, is 5.8 months, the fastest since 2006 and down from 8.6 months a year earlier.
Lauren Sharfman said interest in her gut-renovated Wainscott home picked up toward the end of the year. She first listed the five-bedroom property for sale in October 2011 at $3.75 million, only to see visitors casually give it a glance and make tentative offers. After almost a year and a price cut, buyers started getting serious.
In the boom times of 2007, “people got all excited about getting a place” in the Hamptons after enjoying three months of weekends at the beach, she said.
“This was the first summer in a while where people had that mood again,” said Sharfman, co-founder and former chief executive officer of the jewelry brand Ippolita. “It seemed like people in my price range were actually ready to move.”
She bought the Wainscott property for $1.97 million in 2010 and designed her “dream home,” building two additions with 24- foot (7-meter) ceilings, she said. A buyer went into contract in October and the deal closed in December for $3.45 million.
Sharfman, 45, enjoyed the project so much that she decided she’d like to do it again. She is scheduled to complete a purchase in Water Mill this week.
In the East Hampton area, including Wainscott, 73 homes sold in the fourth quarter, up 40 percent from a year earlier, according to Town & Country. The combined value of those deals was $91.4 million, a 23 percent increase.
In the Bridgehampton area, which includes Water Mill and Sagaponack, purchases jumped 74 percent, Town & Country said. The dollar value of the 54 sales was $209.5 million, up 51 percent from the final three months of 2011.
To contact the editor responsible for this story: Kara Wetzel at email@example.com