With NABIE headquartered in the heart of the “Hamptons” real estate trends here may not fully or accurately reflect trends elsewhere in the nation. However, recent reports do support the fact that increases in sales are occurring, even if prices are not returning to anything like pre-2007 or 2008 levels.
There has certainly been an uptick in calls I have received for inspections, and for those service providers who drive vehicles advertising their inspection services on the sides of vans and cars I’ve seen more vehicles lately than in quite some time.
A recent news story reports that for the first time in years, what might be considered “entry level” buyers are getting access to Hamptons properties at more “reasonable” prices. It wasn’t long ago when home pricing in this area had median values approaching a million dollars. Today it may be possible to find Hamptons homes at less than $500000.
Perhaps trends in wealthy areas may be an indicator to similar conditions elsewhere across the country.
Properties are beginning to appear, and sell, for under $500000. While pricing may still be high for many budgets, it is possible to find real estate close to beach locations and in some relatively exclusive communities. Many of these houses are selling in the mid to high $400000 range, needing work and often only about 1100 square feet in size. But they are providing entry into the Hamptons real estate scene for many who were excluded for years. It used to be that homes priced in that range during boom years were in undesirable areas, or were candidates for tear down – making the purchase price one that represented land value as opposed to building and land value.
Interestingly enough, while many buyers may still be seeking the services of building inspection engineers or home inspectors, any number have trended back to using contractors to evaluate the feasibility of the purchase. I can only speculate that such a strategy on the part of a reasonably well informed buyer indicates a desire to simultaneously explore renovation costs while attempting to gauge condition.
This summer there were 720 houses listed for sale in the Hamptons for $500000 or less. Any number of those homes were listed at prices significantly reduced from where they had been originally. Typical listing price drops have been in the range of 4 to as high as 15 percent, and keep in mind that even the original asking prices were substantially less than what the market permitted five years ago. Recalibration and stabilization of the market has begun to take effect. Bargain sales have appeared to get the market going again, but clearly have skewed prices downwards. Fifty six percent of this summer’s sales were for homes under $1000000.
Of course it still remains the Hamptons real estate market. So that means a “fixer upper” can be priced at $335000, while even an 1100 square foot cottage in the most exclusive part of an even more exclusive community sells at $3495000.
The Hamptons remains largely a second home market, so many of the buyers are people who by all standards are affluent. However, affluent young professionals from New York City who just a few years ago were priced entirely out of the market now find that, with some sweat equity, they can obtain some decent second home real estate.
If you’re a believer in “trickle down economics” perhaps the gradual revival of an exclusive real estate market – albeit at significantly adjusted pricing – portends an improvement trend for the nation in general.
