Hamptons Mega-Mansion Market Goes Cold As Folks Search For 'Modest' $5-10mm Homes Instead

Tyler Durden's picture

The wealthy bankers and hedgies of Manhattan celebrated a few weeks back when Douglas Elliman released their 2Q 2017 Hamptons real estate guide showing that the market for excessively priced weekend home was on the rebound.  Both pricing and volume of home sales were up 'bigly' year-over-year at 12.7% and 22.8%, respectively. 

All of which is great news because we had been hearing all sorts of horror stories about people potentially having to give up one of their lambo's if the market got much worse...

Hamptons

 

But, as Bloomberg points out today, there is one segment of the Hamptons market that is still completely dead, namely the massive mega-mansions of the late 90's and early 2000's.  As Bridgehampton realtor Paul Brennan notes, "great big huge houses are just so last season, darling"...well, we're paraphrasing a little.

“Those great big huge houses from the 1990s and early 2000s, they’re sitting,” said Paul Brennan, a Bridgehampton-based broker at Douglas Elliman Real Estate. “I think that conspicuous consumption isn’t in vogue these days, and that’s why bigger isn’t better.”

 

He continues, “The taste is: ‘I want it now, and I don’t want it huge,’ and those substantial houses haven’t come down in price enough to either knock them down or renovate them to a certain standard.”

 

Taste aside, it’s also about recognizing that mega-mansions aren’t always the most fun to live in.

 

“I think there’s a different awareness,” said Moore, of Sotheby’s. “If you have a really large family, with grandchildren and staff, of course you want to accommodate everyone graciously.” When a house is too large, though, “that almost suggests an alienation factor between families, where everybody is in their own wing.”

But Debbie Brenneman of Corcoran would like to reassure you that if your family of four decides to downsize from a 13,000 to 8,000 square foot home, you'll still be able to survive your grueling, cramped weekends without tripping all over each other.

Smaller, she added, is a relative term as well. “If you go from 13,000 to 8,000 square feet, it’s still a large home.”

Hamptosn

 

Oh, and if you have a tennis court, you might as well bulldoze that right now because the guilty conscience of New York's modern-day, liberal millionaire simply can't have people thinking he's a pretentious, greedy scumbag...you know, because a 'modest' 8,000 sq. ft. weekend home without a tennis court just screams out 'I'm a man of the people.'

“Before, everyone’s theater had to be bigger than the next,” he said. “Now they’re doing flex-rooms, where the screen can come down, but when it’s up, it can be a rec room for the kids.”

 

Tennis courts, once considered a beacon of the blue-blooded life, have also fallen from favor.

 

“It’s not an imperative for most people,” Moore said. And even when it is, buyers soon find that it’s more for show than regular use. “Some people still seem to like the fact that they could at least put a tennis court on the property,” Brennan said. “But they don’t use it.”

So what is selling?  Shockingly, houses that have dropped 25-50% in price are attracting the most interest...thank God Bloomberg was able to interview some local real estate experts who were able to explain how basic math works.  We now understand why these agents are worth every penny of their 6% commission checks.

Location, unsurprisingly given that this is a beach destination, is about proximity to the ocean.

 

“That’s what people come out here for,” said Moore. “You want to be as close as you can afford.” This week, Moore listed a 5,000-square-foot house on the beach for $55 million.

 

"Primarily, people are buying houses that have come down in price from their initial ask by probably 25 to 50 percent,” he said. “That’s what’s selling.”

Hamptons

 

So there you have, sometimes smaller is better...but just don't go below 8,000 square feet because at some point it just stops being trendy and starts getting embarrassing.

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roadhazard's picture

Jed Clamplett's got his shack on the Left Coast up for sale. If you have to ask how much you can't afford it.

Bob's picture

The one with the see-ment pond out yonder in the back?

Gonna be too many naughts in that price for me. 

Son of Loki's picture

Why don't BLM protest there ?

Stuck on Zero's picture

I think that a huge 30 story halfway home for recent refugees from the middle east would look good in the Hamptons. The people who live there have been championing immigration so they would be so happy.

Stormtrooper's picture

Yep!  That's where Jethro grows the Bullfrogs for special frog leg dinners.

land_of_the_few's picture

Git yer Bullfrogs, fresh Bullfrogs right here!

https://www.youtube.com/watch?v=gVr53ufL5Nk

Bonus scene - gasoline is not a drink!

https://www.youtube.com/watch?v=g8AY98lwmvQ

 

south40_dreams's picture

Does this mean there's a shortage of money to steal? Oh my

Gods's picture

Modest 5-10mil HAHA now that shit is funny

PrezTrump's picture

had you bought 10k worth of blue chips after 08 you could have had it too

land_of_the_few's picture

10mm houses, but they look bigger in the picture-

$5 dollah good price, seller love you long time? :D

HRClinton's picture

That old wooden beach house was used in a scene in Deep Impact. 

How symbolic.

land_of_the_few's picture

That the one with John Holmes?

JustPrintMoreDuh's picture

Party's over bitchez

PrezTrump's picture

Your name is a 100% contradiction to your statement.

Whoa Dammit's picture

The 1990's and 2000's mega-mansions had what at the time were trendy interiors that are now out of style. They are so big, the cost to renovate them is astronomical. 

Whoa Dammit's picture

The 1990's and 2000's mega-mansions had what at the time were trendy interiors that are now out of style. They are so big, the cost to renovate them is astronomical. 

FreeShitter's picture

Nigga jews are broke these dayz.....

Big Corked Boots's picture

The Hamptons need another 1938 hurricane.

kenny500c's picture

If you can afford one of these McMansions on the Beach you want to design and build your own, not buy used.

CRM114's picture

That's a nice balcony.

The owners are going to look real good hanging from it when the revolution comes.

allgoodmen's picture

The agents don't get 6%. You're stupid to list even at 3% - and that gets split four ways, so an agent might get like 0.75%

edifice's picture

.75% of $55 million is $412,500. A nice chunk of change for walking someone through a structure, pointing out the obvious...

"And this is the kitchen..."

"No shit..." 

Stan Smith's picture

   Most folks dont figure that though.    One needs to figure agents get 1-1.5% of most deals,  and when way up high in the millions, the total cut isnt anywhere near where most mortals are dealing with the market.   It's still an assload of cash though.

coast1's picture

bigger is not better?   thats NOT what 'she' said

peippe's picture

Wait, so I could've been squatting in one of these all summer?

dammit it all.  : l

83_vf_1100_c's picture

$5-10 mil? The horror! How is one to entertain. Only 8000 sq ft. Ffs, i might actually bump into one of the kids. You know, during the summer when they are not off in boarding school. Rich people problems, real sad for them.

Yen Cross's picture

  I can't even imagine the upkeep on one of those giant barns.

   Money laundering at it's finest.

Cluster_Frak's picture

oh phlease, the rich are dumping since the state is bankrupt and taxes are through the roof. This is used to be a 0% income tax state, I believe. Not anymore. The music stopped and for once wealthy are holding the bag. Everyone is running for Florida and other low tax places.