Home sales rose sharply in the Hamptons this spring to the highest levels in years, but the increase didn’t include the huge estates and oceanfront mansions favored by the very rich.
Instead, less well-heeled home buyers stepped in to pick up what passes for lower-priced second homes in the Hamptons—those under $1 million, which had seen steep price declines over recent years.
Sales of these homes rose earlier in the year and then spiked by 42% during the second quarter compared with the same quarter in 2011, according to market report being released Thursday by Brown Harris Stevens.
In contrast, only 12 homes sold for more than $8 million during the latest quarter, the report found, the same number as the same quarter last year. The biggest sale of the quarter was far from a blockbuster—a $27.25 million sale of a 7,000-square-foot house on the ocean on Surfside Drive in Bridgehampton.
Driving the increase in these lower-end sales, brokers said, was job growth in the New York City economy, lower asking prices and a change in lifestyle that is leading members of the baby-boom generation to look for second homes closer to home rather than in other parts of the country.
“It shows that when things pick up in New York, they pick up here, too,” said Cia Comnas, who oversees Brown Harris Stevens offices in the Hamptons. She said strong activity was continuing in July, normally a slow month.
Dottie Herman, the president of Prudential Douglas Elliman, said the second-home market had revived.
“It hasn’t done what the city has done, but it has done a lot better than the rest of Long Island and the rest of the country,” she said.
Robert Eyre, a retired school administrator in Westfield N.J., looked to buy a second home in the Hamptons in 2007, but said he was “kind of discouraged by the prices.”
When he tried again last year, he and his broker, Hara Kang of Prudential Douglas Elliman, found sellers much more willing to negotiate. Earlier this year, he and his partner closed on a four-bedroom house with a pool for $640,000 in the Springs section of East Hampton.
A previous owner had paid $725,000 for the same house in 2005, and then completely renovated the property, finished the basement, replaced the mechanicals and extended the deck around the pool.
“The ability to negotiate has improved dramatically and we have been able to close a lot more deals,” Mr. Kang said.
The new Brown Harris Stevens report found that the sales for less than $1 million accounted for 56% of all transactions in the Hampton, up from 49% a year ago. This pickup in lower-priced sales had the effect of bringing down median prices for all sales, the report found.
Another market report by Prudential Douglas Elliman found that the number of sales in the second quarter were the highest since the first quarter of 2007, a time when sale prices were hitting a peak and when many would-be buyers found themselves priced out of the market.
That report found that the median price fell 9.3% in the latest quarter from the same quarter last year to $850,000, while the average price was down by less by 1% to $1.724 million
Jonathan Miller, the president of Miller Samuel Inc, who prepared the Elliman report, noted several pockets of strength in addition to the below-$1 million market. He said that strong activity between $5 million and $8 million showed that foreign buyers were still active in the Hamptons market.
“There is still a pretty strong presence in the upper end,” he said. “It is just not as far up as the upper, upper end.”
Andrew Saunders, the president of Saunders & Associates, an East End firm, said that it was one of the oddities of the market that “under $2 million in the Hamptons is perversely regarded as the lower end of the market.”
“If you take $2 million to Cincinnati you are like Sinatra,” he said.
The outlook for the rest of the year is uncertain, brokers say. Mr. Saunders noted that a strong market at the start of last year was chilled later in the year by negative economic news. So far this year, he said there was “tremendous conviction in the market.”
Other brokers said that high-end sales may pick up later in 2012, as sellers rush to close deals before year end when taxes on capital gains may rise sharply.
