Spring Forward: East End Real Estate Gets Busy

As spring slowly comes to the Hamptons, the results of 2013’s real estate buying spree (Newsday) are coming into focus, sharpening expectations of what will surely be an increasingly robust market going forward. What had been a slow and steady recovery since the worst of the recession got a boost from last year’s stock market gains of nearly 30% and the fiscal cliff tax changes enacted beginning last year driving the market to its best performance since 2005, but still leaving present prices below peak levels.

Not only are real estate brokers working hard to keep up with the demand, but so is everyone else from lawyers to lawn maintenance workers.

“It’s difficult to say if last year was as busy as ten years ago, Kyle T. Lynch, attorney at Bainton Lynch, with offices in New York City, Uniondale and East Hampton said in an email, “But it certainly was busy enough.”

According to the latest Douglas Elliman Decade Report for the North Fork of Long Island and the Hamptons sales numbers are still slightly lower than they were a decade ago: 2,610 houses sold in 2013 and 3,073 sold in 2004.

Prices though, according to the Elliman report are considerably higher than ten years ago. The average sales price in 2013 for houses on the North Fork and the Hamptons is $ $1,528,341, which is 44.7% higher than in 2004. And, the average sales price in the luxury category was a $7,124,449 million—more than 4.5 times as expensive than the average home sale.

“I think one should realize,” Lynch said, “The East End is really two markets. One for the very wealthy and the other for those on their way in and up.”

According to the Suffolk County Legislature's Budget Review Office homeowners in Riverhead, Southold, Southampton, East Hampton and Shelter Island will pay more than $775 million in property taxes this year—up more than 60 percent than ten years ago.

“It does seem,” Lynch observed, “’new construction’ is at a premium. It’s only natural when available land is limited by nature itself and the very important local priority of preserving open space.”

Vacant land is scarce, especially in desirable areas, so the culture of tearing down the old and building new has become almost, but not completely ubiquitous.

“Recyle - Renew – Rejoice,” Douglas Elliman broker Bonny Aarons said in an email. “At this time of tear down houses and building McMansions it is refreshing to save one.”

71 Jacqueline in the Amagansett Dunes, listed by Aarons is a perfect example of what she sees as value in this particular market. The current owners bought the house in 2011, and since then it has received higher bids from builders who only want the land.

But, the owner didn’t want to see it torn down and made the financial commitment to bringing the infrastructure up to date—with new heat and air conditioning, upgraded siding, windows, doors and the more than 1,000 square feet of decking.

Designed in 1972 by the architect Franklin Israel and built by John Caramagna the vintage beach house, on a prime private bit of the dunes—now has 2,300 square feet of sleek living space with six bedrooms and three baths. It’s listed at $2,475,000.

“This is the look everyone wants,” Aarons said, “and tries to duplicate now, but it’s an original.”  

“When it comes down to it,” said Lynch, “the East End of Long Island is a great place to spend time. It’s stunningly beautiful, the communities are strong and the people are great.”