The Hamptons’ real estate boom is not immune to the financial troubles of Wall Street and the national economy, as evidenced by third quarter reports on sales on the East End, which show a downturn.
According to George R. Simpson, President of Suffolk Research Service, Inc. figures from the third quarter of 2008 show a decline when compared to figures from the same quarter of 2007. According to Simpson, the average home price on the East End of Long Island is projected at $612,500 this last quarter, as compared with $717,000 in the third quarter of 2007, said Simpson. According to Simpson’s figures, that places the average home price below the median for the same quarter in 2006, which was $625,000.
Overall dollar sales also declined, he reported, from $1.005 billion in 2007 to $534 million in 2008. The number of homes sold during this period also shows a downturn, according to Simpson’s report, from 701 in 2007 to 468 in the third quarter of 2008. Both overall sales figures and the numbers of homes sold are down significantly in the third quarter from how the market performed in 2006.
According to Simpson’s report, home prices on the East End have grown dramatically since the third quarter of 2000 when the median price of a home was $280,000. The average price of a home peaked in 2007 at $825,000, which represented an almost three-fold increase over the course of eight years.
Simpson’s report shows that the downturn in the market is not reserved for residential sales in the third quarter with vacant lane also experiencing a decrease in its median price and in dollar sales. According to Simpson, the median price of land is down 10 percent to $495,000 per parcel. Sales are also down on vacant land, dropping to $74 million in the third quarter of 2008 from $143 million in the third quarter of 2007. The number of parcels sold is also down for the quarter from 84 parcels in 2007 to 64 in 2008.
Of the five East End towns, Simpson notes that Shelter Island has shown the most market resiliency during these turbulent economic times. The median price of a single family home on “The Rock” is actually up – from $860,000 in the third quarter of 2007 to $896,000 in the third quarter of 2008. However, said Simpson, total dollar sales did drop from $33 million in 2007 to $13 million in 2008.
In East Hampton the average price of a home fell 17.5 percent from $1.17 million to $964,999, according to Simpson, with overall sales dropping over 50 percent from $293 million to $128 million. Just 84 residences have sold in the third quarter this year as opposed to 154 in 2007.
The Town of Southampton shows a similar, although less foreboding trend, with single-family homes dropping 26.8 percent in their median values from $990,00 in 2007 to $725,000 in 2008. Overall sales, said Simpson, are down 45.7 percent from $543 million to $295 million with 100 fewer homes sold in 2008.
Suffolk Research Service, Inc.Â is not the only firm showing a downturn in the East End real estate market for the third quarter. A report commissioned by Prudential Douglas Elliman Real Estate and completed by the Manhattan-based group Miller Samuel appraisal firm also showed a decline, reportedly revealing that prices on the North and South Forks have fallen 17.3 percent from last year’s figures, and 10.8 percent from the second quarter of 2008.
For more information or for updated figures from the Suffolk Research Service, Inc. visit www.suffolkresearch.com.