Home prices in New York’s Hamptons, the beachside retreat of financiers and celebrities, declined 13 percent in the fourth quarter from a year earlier as buyers opted for less-expensive properties.
The median price of homes that sold in the three months ended Dec. 31 fell to $780,000 from $900,000 in the fourth quarter of 2010, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today.
A surge in purchases of properties for $5 million and above skewed the median price at the end of 2010 as sellers rushed to complete deals amid concern that capital-gains taxes for top earners would rise last year, according to Jonathan Miller, president of New York-based Miller Samuel. The number of sales in the fourth quarter, usually a slower period for Long Island’s East End, was little changed from a year earlier at 406.
“The combination of low interest rates and buyers being more confident about the Hamptons resulted in stable sales activity rather than a seasonal falloff,” Miller said in an interview.
The number of Hamptons properties listed for sale dropped 28 percent in the quarter to 1,165, even as houses lingered on the market longer, according to Miller Samuel and Prudential. Homes took an average of 206 days to sell, up 21 percent from a year earlier.
The slump in prices came as homes priced below $1 million accounted for the majority of sales, according to Gregory Heym, chief economist for brokerage Brown Harris Stevens, which also released a report on the Hamptons today.
‘Jumping In’ Sixty percent of deals in the fourth quarter were for less than $1 million, compared with 53 percent a year earlier, Heym said. The median price fell 13 percent to $842,500, while the number of sales climbed 3 percent to 298, according to Brown Harris.
“People are jumping in because they’re getting lower prices at good mortgage rates,” Heym said.
The average rate for a 30-year fixed U.S. home loan dropped below 4 percent in October for the first time in Freddie Mac records dating to 1971. The rate was 4 percent or lower for all but three weeks in the fourth quarter, according to the McLean Virginia-based mortgage financier.
A third report on the Hamptons issued this week also showed a price decline. Town & Country Real Estate said the fourth- quarter median was $787,500, a 16 percent decrease from a year earlier. Deals climbed 9.4 percent to 290, according to the brokerage.
Near the Ocean Properties south of the area’s primary highway of Route 27, which are closer to the ocean, had a 1.9 percent increase in the median price to $962,625, according to Miller Samuel and Prudential. North of the roadway, the median was $700,000, down 21 percent from a year earlier.
Gregg Saunders, vice president of retail real estate development at Philips International, had been in no rush to sell a house north of Route 27 in Sagaponack that was built for him and his wife in 1998. The four-bedroom property with a tennis court and pool had been on the market for two years at $2.9 million.
Then last year, he bought a historic home on an acre of land closer to the beach in the same town for $2.45 million.
Saunders said he “didn’t want to be stuck with two homes,” so he cut the price on the first house “dramatically.” It sold in December for $1.75 million.
Madonna, Lady Gaga “You will get a deal on anything north of the highway,” Saunders said. “Once you go south of the highway, it’s a different animal. When you have Madonna and Lady Gaga as your neighbors, you know the property’s hot.”
Hamptons homes have recovered more than half their value after tumbling 39 percent from the peak in the second quarter of 2007, when the median price was $1.1 million, Miller said.
The fourth quarter’s 13 percent decrease means cheaper properties are changing hands, not that values in the beachfront towns are slipping, he said.
“If you owned a home a year ago, chances are that home today would be worth about the same,” Miller said.