Friday, April 24, 2009

Now Everyone Is Crying. Even Richie Rich.

Home prices in the Hamptons, the oceanside getaway of celebrities and Wall Street financiers, plummeted in the first quarter as the financial crisis cut demand for vacation properties.
The median price fell 23 percent from a year earlier to $675,000. Sellers offered average discounts of 11 percent off their asking price, up from 9.6 percent in the year-earlier quarter, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today in a report.
“The primary reason is linkage to Wall Street,” said Miller Samuel President Jonathan Miller. “You’ve got job loss, anticipated job loss, as well as lower compensation and anticipated lower compensation. There’s less of an urgency for people who aren’t affected by that to buy.”
About 23,300 Wall Street employees lost their jobs in the year through February as banks worldwide posted losses and mortgage-related asset writedowns of $1.3 trillion. The credit crisis that claimed Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Bear Stearns Cos. also pushed bonuses down 44 percent in 2008, state Comptroller Thomas DiNapoli said.
The number of homes for sale in the Hamptons, about 100 miles east of New York City, rose 15 percent to 1,673 properties in the first quarter, the largest year-over-year increase since Miller Samuel began keeping records in 2004.

Cutting Prices

The Hamptons are known for multimillion-dollar beachfront estates and homeowners there have included comedian Jerry Seinfeld, real estate developer and publisher Mortimer Zuckerman and billionaire Ronald Perelman. The area is comprised of more than a dozen towns and villages including Amagansett, Water Mill, Bridgehampton and Sag Harbor.
Damon Liss, a Manhattan interior designer and real estate broker for the New York-based Corcoran Group, has been trying to sell a three-bedroom East Hampton cottage since January.
Liss renovated the house, added a swimming pool and new oak floors and then listed it for $1.33 million. In April, he cut the price almost 10 percent to 1.2 million.
“The lower the price the more likelihood it’s going to sell,” he said.
Motivated sellers will follow, Dottie Herman, chief executive officer of Prudential Douglas Elliman, said in an interview.
Dead Market
“In January and February there was basically nothing going on,” Herman said. “There are probably people in the financial sector that really have to cut back.”
In the three months ended March 31, transactions declined 54 percent to 145 properties in the Hamptons. Prudential’s data covers the South Fork of Long Island from Westhampton to Montauk.
In neighborhoods that are close to the ocean where properties sell at a premium, the median home price dropped 45 percent to $637,500 from the year earlier quarter, Miller Samuel said. That’s the biggest decline among all Hamptons neighborhoods and is known as “south of the highway.”
Homes north of Route 27 declined 8.7 percent to $685,000. The median price of homes east of the Shinnecock Canal declined 37.6 percent to $760,000.
Not Happy
The overall drop in sales is the biggest decline since at least 1992, said George Simpson, owner of real estate data company Suffolk Research Service Inc.
“It’s not a very happy place out here,” Simpson said in an interview.
The dollar value of all Hamptons transactions in the first quarter plunged 62 percent form a year earlier to $298 million, according Suffolk Research.
In the luxury market, the top 10 percent of all sales, the median price slid 25 percent to $4.09 million. The number of sales fell to 20 from 40 in the prior year and there were 470 luxury properties on the market in the first quarter.
In a separate report issued today, Miller Samuel and Prudential said the median sales price in New York’s Nassau and Suffolk counties fell 13 percent to $355,000.
The number of sales declined 18 percent to 2,872 and homes stood on the market 134 days before being sold. The data excludes the Hamptons. In Nassau county alone, the median price fell 12 percent to $396,000 and in Suffolk it declined 13 percent to $315,000. To contact the reporter on this story: Oshrat Carmiel in New York at