The Hamptons' Split Housing Personality
By DAN DORFMANSeptember 7, 2007
Call it a $5 million housing blunder in the Hamptons, New York's premier summer playground for the rich and famous.
Last month, when the stock market was repeatedly bombed with triple-digit losses in the Dow, a city hedge fund trader bemoaned the fact he had committed himself to the purchase of an $18.7 million home in the Hamptons. The trader was so worried, in fact, that in early August, when the market continued to languish, he walked away from the transaction and lost the $150,000 good-faith deposit he had put down.
It was a dumb decision. Despite the national housing slump, that same home just sold for nearly $24 million.
But while large Hampton estates such as this continue to see prices rise, for smaller homes, for sale signs are rife.
"I've never seen so many Hamptons homes on the block," says Marcia Wolf, who, along with her husband, Norman, president of the women's sportswear producer Carole Wrenn Corp., have owned a house in Westhampton since 1979. "We see an awful lot of homes for sale and they're sitting for longer and longer periods."
By DAN DORFMANSeptember 7, 2007
Call it a $5 million housing blunder in the Hamptons, New York's premier summer playground for the rich and famous.
Last month, when the stock market was repeatedly bombed with triple-digit losses in the Dow, a city hedge fund trader bemoaned the fact he had committed himself to the purchase of an $18.7 million home in the Hamptons. The trader was so worried, in fact, that in early August, when the market continued to languish, he walked away from the transaction and lost the $150,000 good-faith deposit he had put down.
It was a dumb decision. Despite the national housing slump, that same home just sold for nearly $24 million.
But while large Hampton estates such as this continue to see prices rise, for smaller homes, for sale signs are rife.
"I've never seen so many Hamptons homes on the block," says Marcia Wolf, who, along with her husband, Norman, president of the women's sportswear producer Carole Wrenn Corp., have owned a house in Westhampton since 1979. "We see an awful lot of homes for sale and they're sitting for longer and longer periods."
Most of these homes, Mr. Wolf says, are in the $1 million to $3 million range.
Why the disparity? "Because you now have a split real estate personality in the Hamptons," Denise Lefrak Calicchio, tells me. "The high end of the market [$15 million and up] is off the charts, while you can't give away homes in the $2 million range."
It's a buyer's market in the low and medium ranges and a seller's market at the high end, she says. Mrs. Calicchio, daughter of the late real estate mogul Samuel Lefrak and the author of "High Rise Low Down," a colorful look at New York City residences of the rich and powerful, cites one conspicuous example: The owner of a luxury beach home in Southampton put the property on the market for $70 million. Within a week, the seller received a $65 million offer but refused to budge. It may be, Mrs. Calicchio speculates, that if the seller is patient, she could get more than she's asking for.
One of the drivers of all the high-end real estate sales is buyers from abroad. In fact, Mrs. Calicchio sees the Hamptons increasingly evolving into an international summer paradise, as foreign buyers take advantage of the rising value in the euro against the weak dollar.
There are a lot more global buyers, a leading Hamptons real estate appraiser, John Watson, tells me. He points in particular to potential buyers from such countries as Spain, Britain, Ireland, France, and Russia.
Not everyone thinks the low end of the Hamptons real estate market is slumbering. While August and September are traditionally a sleepy period for Hamptons home sales, this year is different, Mr. Watson says. He currently has 102 pending contracts, ranging from small condos at $250,000 to homes at around $18 million.
Why the disparity? "Because you now have a split real estate personality in the Hamptons," Denise Lefrak Calicchio, tells me. "The high end of the market [$15 million and up] is off the charts, while you can't give away homes in the $2 million range."
It's a buyer's market in the low and medium ranges and a seller's market at the high end, she says. Mrs. Calicchio, daughter of the late real estate mogul Samuel Lefrak and the author of "High Rise Low Down," a colorful look at New York City residences of the rich and powerful, cites one conspicuous example: The owner of a luxury beach home in Southampton put the property on the market for $70 million. Within a week, the seller received a $65 million offer but refused to budge. It may be, Mrs. Calicchio speculates, that if the seller is patient, she could get more than she's asking for.
One of the drivers of all the high-end real estate sales is buyers from abroad. In fact, Mrs. Calicchio sees the Hamptons increasingly evolving into an international summer paradise, as foreign buyers take advantage of the rising value in the euro against the weak dollar.
There are a lot more global buyers, a leading Hamptons real estate appraiser, John Watson, tells me. He points in particular to potential buyers from such countries as Spain, Britain, Ireland, France, and Russia.
Not everyone thinks the low end of the Hamptons real estate market is slumbering. While August and September are traditionally a sleepy period for Hamptons home sales, this year is different, Mr. Watson says. He currently has 102 pending contracts, ranging from small condos at $250,000 to homes at around $18 million.
Business is not as frenetic as it was a few years ago, but it's healthy and moving along, he says. He rates inventories — which he notes were never that big to begin with — about on par with a year ago. As for prices, he says the median value is up a bit from last year.
Mr. Watson credits the ongoing solid housing Hamptons demand to low mortgage rates and the fact that people are still making a lot of money. He notes, too, that while this year's Wall Street bonuses, normally a major catalyst for sales, may be down from last year, they should still be substantial. In addition, he says, the Hamptons, like fine art or a yacht, remains a strong status symbol.
One of the Hamptons' most successful real estate brokers is Sotheby's Harold Grant, who over the past 12 months has sold homes valued at about $200 million. It makes no sense he says, to equate a credit crunch in middle America with the Hamptons high-end luxury market, where there is such a lack of supply.
Likewise, he points out, the middle market has graduated from the $2 million to $4 million range to the $4 million to $8 million range. The low end, he notes, now runs from $500,000 to $2 million. The Hamptons sales story, as he sees it, remains a strong story because demand continues to outstrip supply.
The Corcoran Group's leading Hamptons broker, senior vice president Susan Breitenbach, characterizes the high end (above $10 million) as "crazy busy." If you're in the market for such a home and love to paint, she thinks she has just the property for you: Christie Brinkley's $30 million Bridgehampton estate, 20 acres all told, replete with the usual swimming pool, tennis court, and guest house, plus a large artist's studio.
Too steep? Ms. Breitenbach will be happy to show you one of her cheapest offerings, a 6-acre parcel of land in Water Mill for $2.1 million. If you want to live there, figure another $1.6 million for, say, a 4,000-square-foot house.
Mr. Watson credits the ongoing solid housing Hamptons demand to low mortgage rates and the fact that people are still making a lot of money. He notes, too, that while this year's Wall Street bonuses, normally a major catalyst for sales, may be down from last year, they should still be substantial. In addition, he says, the Hamptons, like fine art or a yacht, remains a strong status symbol.
One of the Hamptons' most successful real estate brokers is Sotheby's Harold Grant, who over the past 12 months has sold homes valued at about $200 million. It makes no sense he says, to equate a credit crunch in middle America with the Hamptons high-end luxury market, where there is such a lack of supply.
Likewise, he points out, the middle market has graduated from the $2 million to $4 million range to the $4 million to $8 million range. The low end, he notes, now runs from $500,000 to $2 million. The Hamptons sales story, as he sees it, remains a strong story because demand continues to outstrip supply.
The Corcoran Group's leading Hamptons broker, senior vice president Susan Breitenbach, characterizes the high end (above $10 million) as "crazy busy." If you're in the market for such a home and love to paint, she thinks she has just the property for you: Christie Brinkley's $30 million Bridgehampton estate, 20 acres all told, replete with the usual swimming pool, tennis court, and guest house, plus a large artist's studio.
Too steep? Ms. Breitenbach will be happy to show you one of her cheapest offerings, a 6-acre parcel of land in Water Mill for $2.1 million. If you want to live there, figure another $1.6 million for, say, a 4,000-square-foot house.
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