The Hamptons real-estate market has not only recovered. It's soaring past its pre-crisis peaks.
Sales of homes priced at $2.5 million or more jumped 98 percent in the fourth quarter on Long Island's East End, according to the luxury realty agency Brown Harris Stevens.
Prices in some Hamptons communities have doubled, with the average home price passing $2.1 million in the South Fork. More than 90 homes sold for more than $2.5 million in the Hamptons East End in the quarter.
"A lot of the deals and bargains are gone," said Christopher Burnside, senior director of Brown Harris in the Hamptons. "It's been very sudden."
The Hamptons has long been the beach playground for the New York elite, especially from Wall Street. While the market fell immediately after the crisis, it's been fairly stable for the past two years. But the fourth quarter saw a rush of deals that are marking new highs in prices and volume.
Brokers say much of that was driven by taxes. As part of the "mansion cliff," sellers were willing to take discounts if they could close a deal before January 1, when the tax rate on capital gains was scheduled to increase.
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Brokers say some sellers were willing to shave hundreds of thousands of dollars off the price of their multi-million-dollar listings in order to get a quick deal.
While those deals are gone, sales continue. Burnside said that he has 15 listings now and "I'm showing constantly." He's about to hire another assistant to help with all the showings and deals.
"The market is insane, I've never really seen anything like it."
Brokers say the big problem now is a lack of inventory, including land, for sale on the East End. Burnside said prices have gone up so much, so fast, that they are sometimes passing their all-time highs of 2006 and 2007.
"I'm trying to buy something myself now, and I'm starting to panic," Burnside said. "Good luck trying to find a deal or tear down. "
Brokers say the money for all these deals is largely coming from finance — and mostly from private equity and hedge-fund chiefs. But the big firms on Wall Street are also pumping money into the Hamptons market. Goldman CEO Lloyd Blankfein was one of the high-profile buyers in the fourth quarter, snapping up a $32.5 million estate in Bridgehampton.
Among the big current listings in the Hamptons is another Bridgehampton estate with a 26,000 square-foot mansion on 11.5 acres. The price: $43.5 million. The house has a 10-seat theater, a 2,800-square-foot master suite, bowling alley, racket-ball court, climbing wall, a disco and a 60-foot by 20-foot pool.
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For those who like a more rustic mansion, an estate in Amagansett has an eight bedroom house and 3.6 acres near the ocean. Along with a pool and pool house it also has two beautifully simple barns.
That way, once you've paid your $19.7 million for the property, you can sit back and remember what the Hamptons used to be like before all the money poured in.