It's not too late to buy a North Fork or Hamptons house to use this summer—but here's what you need to know
If you're in the market to buy a second home on the North Fork or South Fork of Long Island, the recently released first quarter market reports from Douglas Elliman should yield some wisdom: First, the median sales price for Hamptons houses slipped 2.8 percent (to $895,000), and the median sales price in the North Fork jumped 18.3 percent (to $550,000), representing its highest first quarter in more than a decade.
It seems that the North Fork is benefiting from the fact that the Hamptons have become so expensive, with many people priced out of the South Fork going for the North Fork instead (and therefore driving up prices).
According to Bloomberg, Wall Street's turbulent first quarter and the 9 percent decrease of Wall Street bonuses in 2015 may be the reason sales activity in the Hamptons fell to the lowest level in three years. But Jonathan Miller, author of the Elliman market report, points out that sales activity in the last few years had been record-breaking. "The disparity between the performance of both markets [North and South Fork] is consistent with the general theme across the region: The lower the price point, the stronger the market," he explains.
Sales of luxury homes in the Hamptons— defined as the top 10 percent of the market, or at least $4.05 million—dropped 20 percent. The median price, though, of $5.5 million, stayed the same.
"The good houses, no matter how expensive, they sell," says Renee Gaudino, of real estate brokerage firm Saunders. "A $21 million house may stay on the market for a while, but that's just because there are only so many people who can afford that," she says.
One interesting trend (that could account for a cooling of sales for high-end properties), says Gaudino, is that "people in the luxury market want to build their own. So instead of buying the inventory of new construction, they cut the budget in half, buy a teardown, and build what they want. Anyone who actually drives through the Hamptons will take note of the extraordinary amount of construction happening. It's actually a boon time for custom builders."
While the rental market has been on par with the past few years, Gaudino says she has seen fewer people renting for the entire summer season. "Maybe it's because it's too expensive, or because people are busy at work, but people want shorter-term rentals," she says.
The hottest properties, says Gaudino, often are rented in the fall, but she says the market for rentals picked up a lot on April 1.
Interestingly, owners of Hamptons properties are increasingly renting out their South Fork houses and spending the summer in the less expensive North Fork.
"When everyone comes from the city in the summer, owners will often downsize to something less expensive; and certainly the North Fork makes sense, because they can still be nearby and can enjoy the beach," says Adina Azarian, a broker with Keller Williams, who lives in the Hamptons. "They certainly amortize their costs that way." Azarian says she's even heard of one owner who rents his Hamptons house out for about a quarter of a million dollars for summer and lives on a boat out in the marina. "People take advantage of the high rents they can get over the summer," she says.
Become a Hamptons (or North Fork) homeowner yourself, with these four properties priced at the area median:
It's not the fanciest house in the Hamptons, and could use some updating, but this four-bedroom house in Westhampton Beach has four bedrooms, three baths and a pool (with a waterfall). Asking price: $890,000
This sweet little three-bedroom, two-bath house is on a cul-de-sac in Bridgehampton. It has an open plan living room and kitchen (which could use a bit of renovation). It backs up to a reserve and there's room for a pool. Asking price: $895,000
You'll get four bedrooms and two baths in this house in Jamesport, complete with an above-ground pool and large backyard. It needs updates, sure (there's a whole lot of wall-to-wall carpeting and some dated kitchen cabinets), but the price is right at $550,999.
Cute seems like a good word to describe this two-bedroom, one-bath cottage in Southold, which sits on 1.2 acres, has a deck, an enclosed porch and a pergola. Asking price: $550,000.
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