Unique Homes Blog

Like France’s Côte d’Azur, the Hamptons are symbolic of fame and fortune. It is where American royalty shops for grand estates.

By Roger Grody

One of America’s most storied vacation retreats for the rich and famous, the Hamptons enjoy such widespread appeal that billionaire financiers, Grammy-winning hip-hop artists and celebrity chefs all share the same stretch of sandy coastline. Just a two-hour drive from Manhattan, it also attracts its fair share of Fortune 500 CEOs and is a popular place for hedge fund managers to spend their mega-bonuses.

In the summertime, city dwellers are drawn by beaches and nature preserves, without sacrificing the comforts of designer boutiques and chic bistros. But Vincent Horcasitas of Prudential Douglas Elliman Real Estate notes that the Hamptons are not exclusively a vacation or weekend destination. “More and more people are living here on a year-round basis or commute to New York City a few days a week,” he says, noting this trend escalated after 9/11 and is supported by exceptional schools as well as the laid-back lifestyle. Denise Rosko, owner of Hamptons Realty Associates and a native of the area, explains, “The Hamptons have whatever you’re into, whether it’s the beach, horses, antiquing, wine tasting, or the arts.”  She is currently observing activity in all segments of the market and is optimistic about the future.

Although local conditions vary widely, Prudential Douglas Elliman indicates the average sales price for a home in the Hamptons was $1.736 million in the second quarter of 2011, up 14.3 percent over 2010, thanks to increased high-end sales. However, Elliman’s Josiane Fleming suggests $4 million to $5 million is the true entry point for luxury, and premier oceanfront homes regularly exceed $25 million. It appears a glut of inventory is the only thing keeping luxury prices in check. Based on listing data at the time of publication, nearly 400 homes were priced at $5 million-plus, with more than one-third of those hitting the $10 million mark.

Susan Breitenbach of The Corcoran Group reported a strong luxury market in the first half of 2011, citing more activity in the $25 million-plus sector than during the entire 2010 calendar year. She currently represents one of the Hamptons’ bona fide trophy properties, the 60-acre Three Ponds Farm Estate in Bridgehampton, offered at $68 million. In addition to a 20,000-square-foot mansion and extensive gardens, the property offers a private 18-hole golf course designed by Rees Jones.

“Buyers are very educated and they’re all looking for a good deal, whether at $2 million or $20 million…and they’re finding them,” says Breitenbach. Fleming concurs, stating, “Buyers have become very savvy and are therefore more selective than in previous years.” Some prices have slipped 20 to 30 percent from market heights, but recharged Wall Street bonuses coupled with significant foreign investment are driving a healthy market. Another positive factor, according to Horcasitas, is that spec building has returned after being dormant for a couple of years.

The cachet value and perceived safety of investing in the Hamptons have attracted foreigners for years, but Horcasitas reports a prevalence of Russian buyers, particularly of über-luxury properties, over the past two years. Rosko is seeing a significant uptick in Asian clients, while Breitenbach estimates at least 20 percent of her buyers are international, citing interest from China, Russia, Germany and France. Fleming observes that many of her European buyers are already residing in Manhattan and, like everybody else, are seduced by the Hamptons’ charm.

The Other Coast
Long Island’s North Shore (aka “Gold Coast”), the setting for F. Scott Fitzgerald’s “The Great Gatsby,” is just a half-hour train ride from Manhattan. As a result, the area is a primary-residence market and Shawn Elliott, president of Shawn Elliott Luxury Homes & Estates, reports an average sales price of $1.7 million — a figure rivaled only by the Hamptons. In addition to local buyers trading up, Elliott reports robust international interest. “We’re on the phone every day with Beijing, Barcelona … our buyers are very diverse.” In 2011, that foreign investment contributed to second and third quarters that were the strongest in four years. Elliott insists this is a great time to buy, using an estate in Upper Brookville just off the fairways of The Mill River Club, to illustrate. “That property, priced at $12.888 million today, would have cost $18 million back in 2006,” he says.

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