The Hamptons, a collection of Long Island beach towns that includes South Fork, Amagansett, Montauk and Southampton, is renowned for its luxurious properties and high-end lifestyle. However, despite its status as an affluent destination, the area's luxury-home market has faced significant headwinds, with recent data showing that sales have plummeted while prices have surged to record levels.
According to appraiser Miller Samuel and brokerage firm Douglas Elliman Real Estate, the median price for sales transactions in the top 10% of the Hamptons market was $8.54 million in Q1 2022, an increase of 11% compared to the previous year. Meanwhile, the average price of high-end homes reached $16.1 million, up 33% from 2021. Despite these increases, the luxury market in the Hamptons has been struggling, with sales falling from 40 in 2021 to just 18 in 2022, a decline of 57%. For all price ranges, deals in the area declined by 57% YoY to 171 in Q1, the second-lowest total since the start of the firms' tracking of the region's sales back in 2005, undercut only by the 145 closings in the same quarter of 2009. However, as Todd Bourgard, CEO of Elliman for Long Island points out, the demand for luxury homes is still robust in the Hamptons, and there are more buyers than available inventory. Bourgard adds that when properties priced reasonably for the luxury market do appear, they attract a great deal of interest.
A shortage of listings on the market has been one of the hurdles potentially affecting sales of luxury homes in the Hamptons. The number of properties for sale has improved somewhat of late, with a 33% increase in inventory YoY, but it is still 54% lower than it was at the beginning of 2020, before the pandemic. Despite many buyers still keen to acquire a home in this desirable enclave, the current market conditions have left quite a few of them feeling frustrated with the limited options available. Jonathan Miller, president of Miller Samuel, suggests that various different variables, including economic uncertainty and fluctuating mortgage rates, have contributed to the decline in sales in the Hamptons. However, Miller predicts that if the market were to see a normal spring, and more homes were to come onto the market, sales would increase immediately.
Despite the decline in sales, the average price of luxury homes remained high in Q1 2022 due to a few significant higher-value deals. The off-market purchase of 32 Windmill Lane, part of an oceanfront East Hampton compound, sold for $77.8 million, and a 5-bedroom house built in 1926 near Georgica Pond was sold for $35 million after two price reductions. While recent sales have fallen short of expectations, the Hamptons continues to be a highly sought-after destination for wealthy buyers seeking a luxury lifestyle. Given the exceptional quality of life it provides, the area is likely to continue to attract wealthy people looking for a home in the lap of luxury.