The Hamptons housing market is booming. But how? Isn't the economy in shambles and the recovery stalling?
Well, yes, but as we've discussed over the last several weeks, those who still have the economic mobility are fleeing cities for rural communities and towns, such as the one on eastern Long Island's South Fork.
For the same price as a multi-million dollar 5 bedroom Manhattan condo, one can easily afford a mansion, with a few acres, garden, tennis court, and maybe even a pool in the Hamptons. If lockdowns come again, instead of being cooped up in a building with no yard, one can have a relaxing cocktail on the back patio while remote working and enjoying the sounds of nature.
A new report via Miller Samuel and Douglas Elliman (seen by CNBC), outlines how Hampton home prices have hit a new record high due to the influx of New Yorkers permanently leaving the city for the beach town.
The median price of a single-family home in the luxurious beach town hit $1.1 million in 2Q20, a 25% increase YoY. The average sale price of a home in the Hamptons during the quarter was up 21% to about $2.1 million, which is relatively cheap, considering how much Manhattan condos cost.
After a couple of years of weakness, Hamptons real estate appears to be bouncing back. The weekenders who have shown up to the beach town for holidays are now becoming permanent residents as city life, considering today's unprecedented challenges, just doesn't make sense anymore.
"These aren't weekenders, or people just here from Memorial Day to Labor Day," said Gary DePersia, a top broker in the Hamptons with Corcoran. "They plan to be here full time for the duration."
DePersia said one of his buyers now works remotely and doesn't need to be in the city anymore.
Jonathan Miller, CEO of Miller Samuel, said 2Q sales in the Hamptons slumped 15% over last year because of the virus pandemic, but it was nothing like the 54% crash in Manhattan. He said once lockdowns in the city ended in June, sales in the Hamptons "exploded."
Miller said wealthy families would on longer spend their days in the city, even after a vaccine is developed. Folks are quickly renovating or buying more year-round homes in the Hamptons.
"I call it 'co-primary' residences," he said. "It's not just using the Hamptons for summers and occasional weekends. It's equal to their Manhattan residence."
Miller said the virus pandemic has given Hamptons real estate a bump, adding that, "the pandemic may have started the trend, but it's the technology, and the acceptance of working from home now, that will make it more lasting."
And it's not just wealthy folks abandoning the city, Wall Street firms are leaving as well...