What is Happening With The Real Estate Market in the Hamptons

It is now a few weeks off from Memorial Day Weekend which marks the beginning of the Summer season. In years past, most people would have their rental deals signed and sealed. Today, thing are much more different in both markets. It must be pointed out that the rental market and the sales market are both different, but are intertwined as well. The reason is that some houses that normally would be on the market for sale, are now added to the rental market since sales are so low, such as a spec house.
This house in the photograph below is listed for sale, and I do not know the price, or how long it has been on the market. It was on a very quiet street with a cul-de-sac, and it looked terrific from the street. New, big, beautiful huge lawn, but the hedges as you can see need to be cut. Street appeal is so important in selling a house. That is the first thing you see when you drive up. Anyway, in terms of the sales department there are reports that things look pretty bad. Inventory is up, and sales are down. Prices are also coming down. The problem is that many people cannot get a loan yet. Things have not kicked in yet from the banks and funding from the US Government. There was one report that quoted sales as being down 66 % over the rate of 2007. Remember, that was 2 years ago, when the market was at it's peak. The selling prices have dropped at least 20 % over last year. Also, more lower priced houses are selling; the 1.2 million and down price points. I have heard that many of the more expensive houses have been hit hard in sales. It is even harder to get a loan, and many of those Wall street folks no longer have a job, or if they do, may not get a bonus. In my personal experience, I bought a new house in June 2008, and feel that I got a good deal then, not only price wise, but also location. South of the Highway, and with water views with 6 bedrooms with pool, and there is nothing in that same price range and location, so I still feel lucky.
You can get much lower prices, but I do strongly feel that there is a lot of garbage on the market, such as old ranch houses that are located in the Village of Southampton with no pool, and only 3 bedrooms, asking over a million dollars.
Now for the Rental Market: There have been reports in local papers and blogs that normally at this time there is 20 % left on the market. These days, there is 50 %. Prices are down 30 % over last year in renting. I saw one report that stated that last last year there were 13,000 rentals on the market, and this year there are 15,000. The increase is due to those houses once listed for sale and now are on the market for rentals. I have listed my house for rentals, and I do get the interest, but what I am seeing is more people pooling together their money for a weekly or weekend share. Even those folks with large groups try very hard to get a super low price. It has been reported that many owners do get angry with the customers because of the low balling, and the owner feeling insulted. My take on it is that both sides have to work together, but not take advantage of the situation. The renter must understand that the costs of owning a house has not come down; taxes, mortgage, gardening, pool, etc. So after awhile, if the price is not good enough, then it is just not worth renting. There is a lot of risk with having strangers in your house. Most people lie, and suggest that it may be 5 people, then you realized that they had a party for 40. Again...it is not an easy choice, but you have to do what is best for your particular situation, and look at it as a business decision. If you are better off by renting at a lower price, then do it, but if your loss could exceed the benefits, then that's another story. Also,ignore all of the stories about the market, becasuse you may have to be more creative to rent. Offer bottled water, Champagne, or free Broadway tickets. You have to make your sale, whether selling a house or renting, stand out. Good Luck!



Photo, JoAnna Levenglick