In the latest snapshot of New York’s residential real estate, two neighboring regions—Long Island and the Hamptons—are heading in starkly different directions. While both are seeing home prices climb, only one is experiencing an uptick in sales.
Suburban Long Island: High Prices, Slowing Sales
The Long Island housing market, excluding its East End, continues to feel the weight of elevated mortgage rates and constrained inventory. According to newly released first-quarter data, prices continued to rise like a rocket ship, and sales continued to slide, mainly driven by one persistent issue: lack of supply.
Listing inventory declined 5.5% year-over-year, marking the second-lowest level in over two decades and 52.5% below the decade average. This severe shortage has helped push average and median sales prices to record highs for the fourth consecutive quarter.
With more than half of all transactions occurring in bidding wars—defined as purchases above the asking price, competition remains fierce among buyers. As per the report, the chronic lack of supply is the most critical metric of the current Long Island housing market.
The Hamptons: Luxury Market Gains Momentum
Just a few miles east, the East End market comprising the Hamptons and North Fork tells a different story. Also characterized by rising prices, this luxury second-home market has started to see sales activity increase thanks to a modest return of inventory.
The report observed that median sales prices in the Hamptons have doubled since the pandemic. This trend was once closely tied to Manhattan’s price trajectory. However, unlike the suburban market, where mortgage rates are a significant deterrent, the Hamptons sees fewer transactions dependent on financing. The Hamptons market is much more of a cash market than Long Island, making it less vulnerable to rising interest rates.
As more listings hit the market, transactions have followed suit. The report added that sales have risen over the past year as supply becomes more available. This highlights the luxury market’s rebound in contrast to the suburban slowdown.
Wall Street’s Windfall and the High-End Boost
The divergent performance between these two housing markets can be traced back to Wall Street. Substantial profits and record bonuses in the financial sector are expected to fuel further demand in the Hamptons, especially amid market volatility.
Considering the market’s relationship with Wall Street and dependence on the financial markets for cash drawdowns, the tariff tantrums of the past couple of weeks might bring more urgency to some investors to reduce exposure to tangible assets from intangible assets, as observed by analysts.
Unlike Long Island’s extreme inventory crunch, the Hamptons have slightly more breathing room, translating to a lower share of bidding wars but more available listings, which is key to sustaining its sales momentum.
A Widening Gap
Ultimately, the divide between the suburban Long Island and the high-end Hamptons market reflects broader economic forces. Affordability in the suburbs continues to erode under rising prices and high rates, while the luxury market is enjoying support from cash-ready buyers and benefiting from financial sector windfalls.
With the wealth gap widening, higher-end niche markets like The Hamptons might be better positioned for more transactions relative to their market size, marking a clear split on the map and in the market.
