If the Hamptons real estate market celebrated the end of last year with a boom — as high-end homebuyers rushed to complete deals before capital gains tax rates spiked at the start of 2013 — then the last three months must have felt like a hangover.
Home sales and prices in the tony enclave plummeted in the first quarter of this year, according to reports released today by the area’s largest residential brokerages.
“We had this mad rush at the end of the year and that poached first quarter activity largely in the high-end of the market,” said Jonathan Miller, president of appraisal firm Miller Samuel.
The average sale price dropped 29.4 percent, to $1.22 million from $1.72 million, compared to the same period in 2012, according to Douglas Elliman’s quarterly report, compiled by Miller. The average price of a Hamptons home in the fourth quarter of 2012 was $2.13 million, or 91 percent less than the previous quarter.
Average prices dropped in all Hamptons markets except for Bridgehampton, according to Brown Harris Stevens’ report. In Bridgehampton, prices increased 29.1 percent year-over-year to $2.13 million from $1.65 million, the report says.
The village of East Hampton posted the biggest year-over-year price decline, according to the Corcoran Group’s report. The average sale price for a home in East Hampton declined 76 percent year-over-year, to $1.41 million from $5.8 million, Corcoran’s report says.
Despite the price drops, the number of transactions increased 20.9 percent year-over-year, to 347 sales from 287 sales, Elliman’s report shows. The growth is the result of an increase in demand coupled with low mortgage rates, Miller said. However, since the previous quarter, the number of transactions fell 34.4 percent, to 347 from 529.
“The biggest characteristic in the market is actually what happened in the fourth quarter versus the first quarter,” he added. “The impact was quite profound on the East End.”
Indeed, the rush to complete transactions before the Jan. 1 deadline absorbed sales that normally would have closed in the first quarter, according to Brown Harris Stevens’ report. Some 239 sales closed during the first quarter of 2013 — 13 percent fewer than the first quarter of 2012, the report says.
In Manhattan and Brooklyn, a similar pre-fiscal cliff rush has meant “chronically low”inventory levels, as well as prices that have stayed steady. However, inventory hasn’t fallen nearly as far year-over-year in the Hamptons, Miller noted, declining only 4.9 percent, to 1,437 listings from 1,511 listings.
That said, the second quarter is “shaping up to be more consistent with seasonal trends,” Miller said, noting the increased activity he is seeing now.
Ernie Cervi, a managing executive director at Corcoran’s Bridgehampton’s office, noted that his agents have been busy in recent months.
“This is our season,” Cervi said. “This is when we’re the busiest.”