Home prices in the Hamptons hit new records as wealthy New Yorkers fled the Covid-19 troubles of the city for the beach, according to a new report.
The median price of a single-family home in the Hamptons reached a record $1.1 million in the second quarter, an increase of 25% over last year's second quarter, according to the report from Miller Samuel and Douglas Elliman. The average sale price hit $2.1 million, as the sale of several eight-figure mansions drove up the average.
The rebound in the Hamptons, after nearly two years of weakness in 2018 and 2019, shows how the coronavirus is remaking the real estate landscape, as affluent people flee big cities for the suburbs and vacation communities. While the Hamptons has long been the summer playground of the Manhattan elite, brokers say the current wave of buyers are making the Hamptons their main home, returning only occasionally to the city for meetings or events.
"These aren't weekenders, or people just here from Memorial Day to Labor Day," said Gary DePersia, a top broker in the Hamptons with Corcoran. "They plan to be here full time for the duration."
DePersia said he recently sold a house for $10 million after a bidding war, to a buyer who was moving from New York City. "The buyer said he just doesn't need to be in the city as much anymore since he can do so much through technology," he said.
Overall sales in the Hamptons fell slightly in the second quarter, by 15% compared with last year, as brokers were banned from showing homes in person for much of quarter. But the decline was much less than in Manhattan, where second-quarter sales fell 54%. When the lockdown ended in June, sales in the Hamptons exploded. Signed contracts nearly doubled in June, according to Jonathan Miller, CEO of Miller Samuel.
Adding to the allure of the Hamptons is that many of the top restaurants, art galleries, stores and luxury brands in Manhattan have opened outposts there, to follow the wealthy buyers. That's given full-time residents more to see and do, and pulled even more business from New York City.
Miller said that even after a vaccine, many wealthy families will spend less time in the city, and so they're upgrading or buying more year-round homes in the Hamptons.
"I call it 'co-primary' residences," he said. "It's not just using the Hamptons for summers and occasional weekends. It's equal to their Manhattan residence."
The strong quarter also shows how Covid-19 has been a windfall for suburbs and beach communities like the Hamptons, which have lagged in the housing rebound after the Great Recession. The Hamptons saw seven straight quarters of declining sales in 2018 and 2019, and the median sales price of a single-family home dipped to $812,500 in 2018.
The declines led to social-media and news commentary that the Hamptons was "dead" as a status symbol and real estate market.
"This has given the Hamptons a new lease on life," Miller said. "The pandemic may have started the trend, but it's the technology, and the acceptance of working from home now, that will make it more lasting."