$5 million-plus market saw the biggest annual rise in sales
Big spenders returned to the Hamptons this summer, swooping up 30% more $5 million-plus homes in the glitzy beach resort than a year earlier, despite an uncertain political and economic backdrop.
Around 40 homes valued at $5 million-plus changed hands in the the summer playground of celebrities and Wall Street bankers in the third quarter of the year, according to Miller Samuel and Douglas Elliman Real Estate’s latest health check of the market released Thursday.
The $1 million-and-below sector also fared well, with 306 sales accounting for a 22% increase, but the number of transactions in the $1 million to $5 million bracket, normally the Hamptons’ sweet spot, tumbled 24% to 171.
Due to a spike in the $5 million-plus price bracket, the median price of a luxury home, defined as the top 10% of sales, increased 17.4% over the past year to reach $6.25 million. The entry threshold for the top 10% of sales in the third quarter was $3.9 million.
As a result, the luxury market outperformed the overall market in terms of price growth, with the latter’s median sales price falling 13.2% to $825,000, the biggest drop since 2013.
This is a turnaround from recent signs of a cooling super-luxury Hamptons market amidsaturated demand and market jitters over the U.S. presidential election, Brexit and China’s slowing economy.
Jonathan Miller, the chief executive of Miller Samuel and author of the report, told Mansion Global that since the financial crisis, bigger sales tend to happen toward the end of year, ahead of possible changes in the tax code. The third quarter, however, is quite early for that to be happening.
“The fourth quarter is when we have the lion’s share of transactions in this price bracket, so it’s not clear whether this uptick in sales over $5 million is just a random event,” he said.
The findings jibe with a separate report from Corcoran, another real estate brokerage, which found that the very top end of the Hamptons market was strong, with the area including Southampton Village, Bridgehampton and East Hampton Town reporting sales over $5 million growing to 11% compared to 8% a year ago.
However, the share of sales from $2 million to $5 million dropped.
“The East End continues to attract buyers and investors, including foreign investors seeking a place to vacation, live year-round or generate income,” said Ernest Cervi, regional senior vice president of Corcoran’s Hamptons office.
“Just in this quarter we closed on three properties over $25 million; a waterfront North Haven property for $33.75 million, a 11,000-square foot home on Noyac Bay in North Haven, and a Southampton oceanfront for $27.5 million.”
LUXURY MARKET (TOP 10% OF SALES)
|Q3 2016||Q3 2015|
|Average sales price||$8,538,746||$7,138,202|
|Number of sales||52||52|
|Average number of days on the market||186||173|
Source: Douglas Elliman Real Estate
BY KATHRYN HOPKINS