The Hamptons, a world-renowned vacation destination in New York, is known for its luxurious properties and high-end real estate market. However, after years of steady growth, the market seems to be taking a turn. For the first time since 2019, the area has experienced a hiccup as home prices fell in the first quarter of 2023, leaving many wondering what’s causing the slide.
According to a Bloomberg analysis of Town & Country Real Estate data, the median home sale price in the Hamptons fell 7.6 percent in the first quarter of 2023. Additionally, the number of homes sold also fell by 44 percent.
Judi Desiderio, the CEO of Town & Country Real Estate, told Bloomberg that “the retreat began with interest rate hikes at an unprecedented pace, due to the highest inflation in four decades, not to mention a stock market that gave even a seasoned investor whiplash.” The fall in home prices was more dramatic in the upper end of the market, with 61 percent fewer homes selling between $10 million and $20 million. However, all 12 of the Hamptons markets tracked by Town & Country saw declines in the overall number of homes sold, while six saw a year-over-year price decline. Prices dropped in Montauk, Amagansett, Southampton Area, Southampton Village, Bridgehampton, and Shelter Island.
The Hamptons real estate market boomed after pandemic lockdown orders as wealthy New Yorkers fled the city. However, a year of rapidly rising interest rates and a banking crisis appears to have finally cooled demand in the area. But it’s not all doom and gloom for the Hamptons housing market. According to a recent report compiled by Miller Samuel for Douglas Elliman, inventory remains low in the Hamptons. Inventory and newly signed contracts in March remained below pre-pandemic levels, though both have been on an upward trend.
“Part of the reason we’re experiencing an uptick in activity is because there’s product for brokers to sell,” Miller said. “But it’s still limited.” Some areas even saw an increase in home prices. Sag Harbor, for instance, saw prices rise by a third, while Hampton Bays, Westhampton, Sag Harbor Village, East Hampton Area, and East Hampton Village also saw increases.
The Hamptons housing hiccup is a reminder that even the most exclusive real estate markets are not immune to economic changes. Buyers and sellers must adjust their expectations and strategies as the market moves past the post-lockdown boom cycle. For buyers, the current market may present an opportunity to secure a luxury property at a discount. For sellers, it may mean adjusting their pricing and marketing strategies to attract buyers in a more competitive market.
Ultimately, what’s being seen in the Hamptons is a reminder that the housing market is constantly evolving and subject to economic changes. While the recent dip in home prices may cause some concern, it’s important to consider the bigger picture and remain aware of market trends and shifts. What the future holds for this exclusive housing market remains to be seen.
