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Hamptons Home Prices Fall as Buyers Avoid Luxury

Friday, 22 Oct 2010 06:58 AM

Home prices in New York’s Hamptons, the beachside resort towns in Long Island swelled by summering Manhattanites, dropped 14 percent in the third quarter from a year earlier as buyers opted for less-expensive properties.

The median price of homes that sold in the quarter fell to $696,000 from $810,000 a year earlier, according to a report today by New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. It was the second-lowest price in the firms’ six years of keeping the data, behind only the $675,000 median in the first quarter of 2009.

“What it suggests to me is not that there was a sharp drop-off in pricing, because there wasn’t,” said Jonathan Miller, the president of Miller Samuel. “It’s a shift in the mix. We had a drop in upper-end sales activity.”

New York City’s financial industry, whose executives fuel high-end Hamptons demand, lost 1,600 jobs in September from August, the state Department of Labor said today. Professional and business services -- a sector that includes lawyers, accountants and architects -- lost 9,000 jobs, the most for September since at least 1990. Wall Street firms may cut 80,000 jobs in the next 18 months and year-end bonuses could be the lowest since 2008, Meredith Whitney, founder of Meredith Whitney Advisory Group, said in a Sept. 30 Bloomberg Radio interview.

11 Homes

Eleven Hamptons homes sold for $5 million or more in the third quarter, compared with 20 a year earlier, Miller said. The median price for luxury properties, defined as the top 10 percent by price, dropped 14 percent in the Hamptons and Long Island’s North Fork to $3.7 million.

“I see the East End as joined at the hip with Wall Street,” Miller said. “Going forward, that’s a concern. The next couple of quarters are not quite clear at the moment.”

Three other reports this week also showed decreases in Hamptons prices in the third quarter. New York brokerage Brown Harris Stevens said in a report today that the median price fell 16 percent from a year earlier to $753,750. About 67 percent of all sales were for homes under $1 million, said Gregory Heym, chief economist at Terra Holdings LLC, which owns Brown Harris.

Town & Country Real Estate said in an Oct. 18 report that prices declined 14 percent across the 11 towns and villages that comprise the Hamptons. The Corcoran Group reported today that the median price of homes fell 8 percent, while the number of properties publicly listed for sale climbed 10 percent from a year earlier, to 8,432.

Buyer’s Market

“We’re ensconced in a buyer’s market again,” said Rick Hoffman, a Corcoran senior vice president who oversees sales on Long Island’s East End.

“With more inventory on board, I don’t see median home prices going up in any great way over the next few months,” Hoffman said in a telephone interview. “There’s more properties competing with each other.”

Within the individual towns, all but Sag Harbor had year- over-year price declines, according to Brown Harris Stevens. In East Hampton, the median price of properties that changed hands in the quarter fell 16 percent to $650,000 -- even as two homes there closed for more than $20 million.

In Amagansett, the median price plunged 58 percent to $763,500 as three-quarters of all properties that sold there were for less than $1 million, according to Brown Harris.

“A shift like that can have a dramatic effect,” Heym said.

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