Illusion is the first of all pleasures.
This turned out to be the summer that never happened in the Hamptons. Between the rain, cool temperatures and lowered expectations, many local businesses that do not serve alcohol suffered. Even restaurants suffered. Beaches were often empty. At times, it was actually quite pleasant not to be buzzed by Porches and Bentley’s trying to find a parking spot at Roger’s Pavilion in Westhampton Beach.
The Real Estate industry continued to contract and several brokers closed-up shop. Estimates of total price drops hover between 35% and 50% from their 2006/2007 highs and the main selling areas are now in the under $500,000 range. While there are sales in the million-dollar territory, price reductions and hard bargaining are now the norm since mortgage money in that category is difficult to obtain. While there are actually some new no-income verification loans available, generally a 30% deposit is required.
There are many differing opinions on when the market will return to some semblance or normality, but right now properties languish on the market for up to two years if they are not priced aggressively – translated: take a beating or sit with an unsold home.
East Hampton has done better in terms of rentals and sales and Southampton has had the biggest drop in activity. This summer, renters started out by offering owners 50% off the listed price. Buyers have brutalized brokers as well as sellers – often walking away after they got their price. Despite this, one $25 million dollar mansion rented for half a million dollars for the month of August only.
Nevertheless, the shake-out will net fewer real estate brokers, fewer rental units and fewer businesses to service them by next summer. Let’s just say that it was not a summer to be in the lawn sprinkler business.