Nobody's Buying Hamptons Mega-Mansions Because 'Small Is The New Big'

Tyler Durden's picture

Any realtor worth their salt will tell you, when it comes to the home-buying habits of wealthy hedgies and bankers, gaudy McMansions and sprawling estates are so last season.

Or, as they say in Greenwich: “Small is the new big."

Owners of large homes in tony Hamptons neighborhoods hoping to cash in on a frothy housing market before the inevitable rise in mortgage rates will be disappointed to learn that the trend of buyers favoring lower-priced homes continued in the third quarter, according to the latest Douglas Elliman Real-Estate Report. This left the high end of the market in a double-bind as supplies of new homes hit the market while sales tapered off...

Purchasers agreed to pay more than the asking price in 10 percent of deals for properties under $3.3 million -- this quarter’s definition of “non-luxury” homes, making up the bottom 90 percent of the market, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest share of transactions with bidding wars since the firms began tracking the data in the second quarter of 2016.

 

In their zeal for lower-end deals, buyers snapped up condos as well. Those units -- with a median sale price of $567,500 -- were available for just 97 days on average before going under contract, the fastest clip in six years of record-keeping. On the high-end, buyers showed less interest in acquiring luxury homes than sellers did in listing them. Inventory in that top 10 percent of the market jumped 22 percent, the biggest pile-up in two years.

 

“The market is looking towards those smaller, more manageable homes,” said Carl Benincasa, a regional vice president at Douglas Elliman who oversees sales in the Hamptons. “That’s certainly been a trend we’ve been observing.”

Bloomberg, which obtained an advance copy of the report, noted that the Hamptons housing market often parallels performance in the financial industry, seeing as many buyers of luxury homes out east are wealthy finance types.

With markets at record highs, the Hamptons housing market is doing reasonably well - but buyers’ unwillingness to snap up the most expensive homes in a way mirrors the trepidation surrounding stretched stock valuations and record low volatility.

With stocks at record highs, people are in a buying mood in the Hamptons. The beachside towns on Eastern Long Island, whose fortunes are closely linked to the performance of the financial industry, had 517 total sales in the three months through September -- or 12 percent more than the 10-year quarterly average, Miller Samuel and Douglas Elliman said. Even with all that buying, inventory declined only in the non-luxury category, with listings dropping 10 percent from a year earlier to 1,143.

 

Deals for less than $500,000 fell 12 percent to 57 -- because there weren’t many such properties available, Town & Country Real Estate said in its report on Hamptons. But sales of homes priced between $500,000 and $999,000 jumped 22 percent to 131, and those between $1 million and $1.99 million climbed 12 percent to 76, the brokerage said.

One realtor noted that inventory is thinnest in the under-$1 million category, which has forced some buyers to the next rung of the market.

“When you look at the inventory under a million, that’s the largest shortage, so buyers stepped up to the next level of the market,” said Ernest Cervi, a senior vice president at Corcoran Group, which released its own report Thursday.

One couple recounted their struggle finding a new home in the Hamptons for under $1 million after selling their old home for $1.4 million.

For Brian DeSesa, it was much easier to sell his under-$2 million home than it was to buy one in that price tier. Sensing the market demand for lower-cost properties, he and his wife listed their three-bedroom Sag Harbor Village house in June at $1.45 million. It went into contract in July, to a buyer offering $1.35 million but willing to pay all cash and close within 14 days, said Jessica von Hagn, the Brown Harris Stevens broker who marketed the property.

 

Then came the hard part: finding a new house in the area for less than $1 million. The couple bid on at least three such properties, offering the asking price each time and getting outbid within hours, said DeSesa, 36, a land-use attorney with the Adam Miller Group in

 

Bridgehampton. On the next try, they offered the $795,000 asking price on a ranch-style home -- and then, in a second round of bidding, offered $860,000, which won them the deal.

 

“It’s pure competition,” von Hagn said. “At the $1 million mark, you’re competing with year-rounders trying to live out there, you’re competing with builders who are going to tear it down, and you’re competing with flippers.”

To be sure, there were still some ultra-luxury deals in the quarter, including two for more than $20 million, the same as a year earlier, Bloomberg reported. Purchases between $5 million and $9.99 million plummeted 56 percent to just 11. Sales were up 30 percent in Bridgehampton, with six deals over $10 million, but plunged 29 percent in the Sag Harbor area, where none of the 17 transactions were for more than $5 million.

Of course, as we noted last quarter, “smaller” in the Hamptons is purely relative, because apparently there’s nothing more modest among today’s Hamptons set than trading a 13,000 square-foot home for an 8,000 square-foot home.
 

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wisehiney's picture

"Hey babe!" 

"Wake up and check this out!"

Implied Violins's picture

"Ok, but remember: for every inch less than ten, I charge a million dollars".

Giant Meteor's picture

A pure travesty. Can't find anything under a million ..

Almost brings a tear to the eye. What is this world coming to?

Why there ought to be a law !

johngaltfla's picture

I thought people quit buying homes in the Hamptons becaue they got sick and tired of their MSM/Hollywood/Politician/Bankster neighbor fucking their wives or copping feels behind their backs?

Giant Meteor's picture

Again, that is a feature, not a bug ...

 

auricle's picture

Tiny mansions, where the rich see how small a mansion they can tuck themselves into. 

Keeping it real like the tiny home folks.

38BWD22's picture

 

 

The best time to sell luxury waterfront condos in S Florida has passed.

China is not buying, nor are Venezuelans.  Look out below.

 

Got The Wrong No's picture

The pool house would be all I need. My house is 3200 SF and between the taxes and the maintenance I have had enough. 

HRH Feant2's picture

Mine is half that size and I have had enough. The 2018 Class B Airstream on a Mercedes chassis . . . I can't stop thinking about it. And if you don't like your neighbor you can drive away in the morning! Love, love, love!

new game's picture

retro 177se behind a tundra limited. not thinking at all. ready to go. ac/heat, shower, and comfy queen bed.

some call it camping. lol....

i say fuk the fuksticks(politicians).

they can all go suk dik in the hamptons.

the hamptons, the last place on earth i would go.

loosers. no envy whatsoever. just plain old loosers of the game of happiness.

bunch of sad, "never enough"  ego driven sociopathic fuksticks.

i hope their homes burn and they don't get out in time...

i really am a nice guy...

 

Winston Churchill's picture

The real estate market died here in S.Florida in the spring. I know lots of properties that are not selling

including ones that normally move fast, the realtors are privately panicking,yet the NAR figures are not

reflecting the fact at all.

Salzburg1756's picture

Are you talking about East coast or West coast S FL? Both? What? Have we run out of rich old white people? I bought on the west coast in April. Realtors were happy then. Irma hurt the market? My house survived her with some small damage to the roof, no leaks. Much damage to trees tho.

Winston Churchill's picture

East coast, realty stopped moving right about then.

thecondor's picture

The T.B area it still moving along. 

Raffie's picture
'Small Is The New Big'

Selling my broom closet for $1.5mil

HRH Feant2's picture

No thanks. These houses will go the way of the dinosaur. I predict many will become new rehab facilities for opiate addicts.

techpriest's picture

At one time old Victorian style mansions were the theme of ghost movies. Apparently they were built in the roaring 20s and abandoned, so kids in the 50s only knew them as long abandoned, condemned properties.

Maybe in 20 years McMansions will be the new ghost house?

new game's picture

no, 4plexes, complete with gov.org subsidies...

 

Golden Showers's picture

Why come I'm always surprised by the number of douchebags there are in this country?

https://www.youtube.com/watch?v=K_b3oPslctA

Masher1's picture

So the high faluting set thinks loking like a huge target is not so good eh?

Bigly's picture

Exactly.

They need to trade in their Range Rover or Bentley for a Toyota too.

HRH Feant2's picture

Apparently Cefro Dolla is begging his flock for money so he can upgrade to a ne 18-passenger jet. Tommy Sotomayor put out a good report earlier about how to spot a nigger scamming. Link to the vid: https://youtu.be/3VAWbMVUFeU

Savvy's picture

We have 1200 a sq ft house on 13 acres, a large shop with 2 beer fridges and a kick ass stereo. I wouldn't trade it for a mansion in the Hamptons.

new game's picture

i am hearing let it bleed cranked. when can i stop by?

Is-Be's picture

A million dollars?

I feel so inferior. 

I guess I should have worked more overtime.

dlweld's picture

Those mega mansions seem so over the top as to be laughable. Buy yourself a pyramid!

Jack's Raging Bile Duct's picture

This company only began tracking data in Q2 2016? How fucking long have they been in business? Excuse me while I ignore any and all analysis from these rookies.

dojufitz's picture

Come down to Melbourne Australia and stare at the insane home prices.....

...your head will never stop shaking and people will think you have Parkinsons.

Don Watcher's picture

You should see New Zealand...practically parabolic.

Rebelrebel7's picture

When the top 1/10th of a percent are rejecting conspicuous consumption, it's basically over. 

Pernicious Gold Phallusy's picture

I wonder whether I could get government grants to buy them up, tear them down, and build high-density Section 8?

Xena fobe's picture

Probably if you "befriend" the right people.  EB5 Chinese investors are swarming So Cal doing this.  Except they build for other Chinese, not sect 8.

Megaton Jim's picture

Jump, you bastards!

911bodysnatchers322's picture

I can't wait to see the 'tinymansions' which is the ultrarich's response to tinyhouses. It's essentially a monster truck with 10 doublewides stacked on top of it, with alternating faceted brushed stainless and tile art deco facade below southwestern stucco with neon trim with areas of indirect track lighting, creating a kind of living art. The top is a pool that is styled as a yacht facade floating above the southwestern 19A0s retro route 66 desert motif. The theme of tinymansion is luxury of movement through the ages

it's at the perfect intersection of stupid modern art, showoffishness and wastefulness

RonBananas's picture

I bought a concrete block home in Costa Rica on Lake Arenal for $55k and put about $30k into it (that's a lot of work here at $4.00 and hour for plumbers electricians and tile guys), No mortgage, so here's the monthly nut...

Electric $60/mo.

Cable $80/mo

Water Bill $6/mo.

Maid $20/one day a week

Landscaper $16 for 6 hours work

Property taxes are $88/yr. and include weekly trash pick up

We have full medical coverage, dental coverage and perscription coverage, 100% for all 3 for $118.00/mo. (Hospitals and doctors rival those in the states)

That's as far as I can get away from the rat race.

I have a friend who just lost his wife 5 months ago and is selling his farm. really nice place, CHEAP TOO

http://edfarmerart.com/finca/

 

 

brushhog's picture

Checked out that farm...3 acres for 300k is CHEAP?? LOL. I bought 80 acres for 250k...3 barns, 25 acres fenced pasture, 40 acres good hay the rest in woods with 1300 sq ft house in the northeast just a couple of years ago.

Bigly's picture

Northest US or Costa Rica?

If US, i can only think inland ME maybe?

brushhog's picture

US. New England. Not Maine, but I dont like to go into more detail than that here.

aurum4040's picture

Its not bad for Costa Rica considering everything it includes...3 water sources is huge. Cedar construction. Coffee production. Crazy amount of fruit trees. View of volcano. Secure. 220V, cable, 4g.....Sounds like you have a good setup as well. Just tougher to get such a modern setup farm in Costa Rica. 

kahplunk's picture

I went to CR last year so nice. The people where freindly and beautiful. The freedom is to be admired made my heart sick to know what America once had and lost seeing this place. I do plan on moving to CR as soon as I save the coin 200k investment to get citizenship or a secured bank account forget dollar amount or proof of income. They do not take in poor people like dumb ass America.

BetterRalph's picture

Out of the California Frying Pan into the NY, long island, greenwich FIRE?
What happens to the FFL AR's etc during the process, free smelt?

Can't bring em back after you checkout of Hostile California --queue song

listen to the song and think, "you can checkout anytime you like, but your AR can never leave."

Other than that, it sounds like a great opertunity for a retired unarmed san Franciscan yuppie tired of living in that expensive pastel cubicle with the chrome spiked dog collar on leather an nose rings, and ear PLUG! (not for hearing!) In a few years they might even learn to handle a John Deer or a rusty Kubota. Oh wait that was GREEN GRASS I saw there..That means they contract it to Lawn service/pool boy--with a john deer, kubota.

Meanwhile Back in California,
Donkey Farts around Gun Parts

My money is on (no that's not a smirk) Becerra (CA) sucking down a great big bottle of agave next week, and creating a bill (spel chk'd by iz MS-13 staffers) banning CRPA Magazines.

He's got like 8 of the rounds in the "CLIP" being tied up in courts right now current issue, even though he's two neurons short of common sense and respect of the office he holds. What was the point of the second amendment again, to keep punk fools like Bacera in their out of My ammo boxes, and magazine release buttons, flash supressors, silencers to protect my hearing while I practice shooting, and new ammo laws, just good grief..)

What is the LAWS intent here? Certainly not honorable. NONE OF IT.
As if we didn't have enough trouble with wildfires and our beautiful Forests having less and less places to go!!!

Like Leland Yee You know the arms trafficking Senator in supermax with the bullet button law we __STILL__ are stuck with, Becerra (CA) already has dirt under the hood with that FAKE SERVER image!!! Yet that punk is still holding office and power and has at least 8 bills I seen..

I don't like California's laws, but I know what CALIFORNIA Can be if we kick these fools out and make this state what it once was.

OUTLAW dual citizens holding office -- Like Feinstein. (two faced)

a move to the Hamptons from Ca, probably not on $125k.

I'm not going to run from California, We are going to have to take it back from these traitors no matter what brand they have behind their name.