By Katherine Clarke
The median sales price for a house in the Hamptons, the string of beachfront communities on Long Island's eastern tip, skyrocketed by 40% to $1.2 million in the third quarter of 2020 compared with the same period a year earlier, according to a new report from brokerage Douglas Elliman.
The surge in prices, spurred by New Yorkers fleeing to the beach amid the coronavirus pandemic, is a remarkable turnaround for the market, which posted a dismal 2019 defined by repeated price cuts on luxury homes.
The surge in prices is even more dramatic for homes on the ultrahigh end of the market, defined by the report as the top 10% of all sales. The median price for a home in that category was up by 65.7% year-over-year to $5.8 million.
Overall, the volume of sales in the Hamptons was up by 51% from last year and up by 291% for closings priced $5 million and up, according to Jonathan Miller of Miller Samuel, who prepared the report on behalf of Elliman.
Mr. Miller said it is the first time he can remember seeing the Hamptons market deviate so much from that of Manhattan, since the two markets usually act in tandem. The Hamptons market relies on the wealthy wanting to live in the city and spending summers "out east," he said.
The coronavirus upended those assumptions as wealthy Manhattanites poured into the Hamptons at the onset of the pandemic and settled in for much longer than they initially expected. For some, the Hamptons has now become their primary home, at least for now, and some have enrolled their children at local schools and gotten accustomed to working remotely and attending meetings via Zoom. By comparison, sales were down by 46.3% in Manhattan in the third quarter.
"For years, I've always described the Hamptons as being joined at the hip with Manhattan and with Wall Street," said Mr. Miller. "Here you have the secondary market outperforming the primary market that it has depended on."
The level of activity in the third quarter left Hamptons inventory 28.4% below the prior-year levels. There are now about nine months of supply of homes on the market based on the current pace of sales, compared with about 19 months during the same period last year. Some of the Hamptons' biggest transactions of the third quarter included the $24 million sale of a seven-bedroom oceanfront compound with a tennis court in East Hampton and the $23.5 million sale of a 7.37-acre, eight-bedroom estate in Sagaponack.
Enzo Morabito, a luxury agent at Douglas Elliman, said he has close to 20 high-end homes in contract right now, a number he called "beyond incredible." Buyers who fled to rentals in the Hamptons early in the pandemic have now converted to buyers, with many looking for move-in ready houses that don't require work, since they don't want strangers in their homes, he said. Some expensive plots of land have even started to trade after a slow couple of years. "That's usually the last thing to go, " he said.
While contract activity doesn't appear to be slowing down in the early fourth quarter, Mr. Miller said it is not clear if the Hamptons boom is built to last.
"Right now we're at peak Zoom," he said. "It's not clear how much of this sticks once there's a vaccine."
Write to Katherine Clarke at katherine.clarke@wsj.com
(END) Dow Jones Newswires
10-22-20 0815ET
