While the housing market may remain soft for some time in the conventional “bread and butter” market, the luxury home market appears to be on the mend at a much rapider rate. The Hamptons residential real estate market, which most experts expected to be hit hard as people shed their second homes during hard times, barely experienced a dip in sales at all during the fourth quarter of 2010 and median sales prices have fallen “just 2 percent to $900,000,” according to reports from local brokers. In fact, the average residential sales price rose 6 percent to $1.85 million[1].
The difference in the median home price and the average sale price is due, in part, to the fact that even high-priced homes are still moving in this “playground” market. In 2010, 38 properties sold for more than $5 million and there were at least two sales for $14 million or more. “We are returning to normal levels,” said chief executive of appraisal firm Miller Samuel, Jonathan Miller. Miller believes that as long as Wall Street continues to perceive the market as stabilizing or even recovering, the Hamptons and many other high-end areas will be okay. “This market is joined at the hip with Wall Street,” he explained.
Other players in the field, such as Dottie Herman, president of another local brokerage, believe that sales will continue to rise as buyers hurry to snap up luxury properties before values start to rise again[2]. “People…felt that prices weren’t going to drop much more,” she explained. “They went after the trophy properties and they got them at a discount from what they would have gotten four years ago.” Other local real estate agents and brokers describe a situation that is “not like a year and a half ago when we were trying to scrape up buyers.” Many of the homes that have sold recently have been on the market and discounted multiple times, but vacant land sales are also on the rise as investors and would-be homeowners put their stake on the local market’s ability to stabilize and rise.
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[1] http://www.crainsnewyork.com/article/20110127/REAL_ESTATE/110129896
[2] http://www.bloomberg.com/news/2011-01-27/hamptons-average-home-price-jumps-on-rising-sales-of-5-million-mansions.html
