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The Hamptons

What to Expect From the Current Hamptons Luxury Real Estate Market

Looking ahead after a blockbuster year

While no agent specializing in Hamptons luxury real estate has a crystal ball, it’s clear that the recent trends of rising prices and fierce demand show few signs of disappearing. The area is among the most sought-after and exclusive residential enclaves on the planet, and 2021 was an excellent year for anyone selling a Hamptons home: The median sales price rose 19%, with the sharpest price gains coming in the second two quarters.

Although homes are costing more, anyone who made a deal may have congratulated themselves, given that listing inventory plummeted around 50% year-over-year by 2021. Meanwhile, the number of listings sold in December was down around 37% on an annual basis. Sales declined because there simply were not enough homes for buyers to purchase.

If you’re considering a home purchase on one of the most prestigious stretches of land in the United States, it will pay to arm yourself with the facts about today’s Hamptons luxury real estate climate. 

Lack of supply is still a defining characteristic

In 2022, the limited supply of homes for sale in the Hamptons continues to be the local real estate market’s primary headline. There were only 450 homes on the market in March of this year, 55% lower than last year.

The overall decline in inventory and increased demand will cause continued price increases. The median sales price increased 16.3% in March to $2.3 million. The highest end of the market is still active, with 46% more luxury properties closing in March than in the same month a year ago.

Be ready to act when you find the right property

Because the supply of Hamptons luxury real estate for sale remains near historic lows, be ready to act when you or your agent finds a location you’re interested in. You also need to be prepared for a bit of competition. If you have all your ducks in a row, you’ll have an easier time getting your foot in the door.

Ready with cash offers will favor you more than a potential buyer who needs financing. Having the expert guidance of a world-class real estate team on your side is also of paramount importance.

All’s fair in love and bidding wars

If you’re lucky enough to find a home for sale in the Hamptons that suits your lifestyle and needs, chances are you won’t be the only person with an eye on it. And this means one thing — a potential bidding war.

It is not uncommon for sellers to get multiple offers on a property even before a house is formally listed for sale. Bidding wars have increased by 24% for Hamptons luxury real estate in recent months. While this is a boon for sellers deciding to sell, buyers are having an increasingly difficult time getting into a Hamptons property without having to negotiate tooth and nail for it.

Expect this trend to continue until enough homes come onto the market to combat lagging inventory. While more developers increase inventory, homes in the $3-$4 million price point are particularly in demand among would-be homebuyers.

The grandest estates are in higher demand than ever

Eye-watering prices have long been a given in Hamptons luxury real estate, but last year’s biggest deals may have made some would-be buyers sob. In 2021, more than $607 million in home sales were realized from just the top 10 transactions in all of the Hamptons.

The former estate of Henry Ford II in Water Mill sold for $105 million  — the humble abode sprawls over 20,000 square feet and has 12 bedrooms and 12 bathrooms. Meanwhile, Calvin Klein’s former East Hampton manse fetched $85 million, while another 15,421-square-foot house in East Hampton that once belonged to a Life Savers heiress sold for $60 million.

Keep an eye on areas that could still pop

While areas like Water Mill are synonymous with the biggest real estate deals in the area, there are still a handful of relatively under-the-radar parts of the Hamptons luxury real estate market that buyers may want to consider for potential upside.

Some buyers may want to concentrate on Remsenburg. The Southampton hamlet was formerly considered a more difficult sell, with large properties and a somewhat isolated setting. Remsenburg is quiet, with no traffic lights and few commercial establishments, but as buyer priorities and sentiments have changed, it is thought of as an up-and-coming Hamptons area. The Springs in East Hampton, with its more rugged and less manicured landscape, is also considered an area that is likely to offer a return on investment.

Expect to pay more for new construction or recent remodels

If you thought your way into Hamptons luxury real estate might be through a new construction property, you are unlikely to find many choices. New builds are scarce, and even recently-remodeled homes are fetching a premium. The rising cost of building materials, supply chain issues, and labor scarcity have made all renovations more costly.

According to Steven Dubb, who heads up the Beechwood Organization, Long Island's largest homebuilder, the “costs for building materials have more than doubled in the past year….naturally, and to the extent, the market will allow it, the cost of buying a new home will increase.”

Land is also part of the space race

Competition for undeveloped land also spurs price increases for undeveloped lots in the Hamptons. In response to the tight home supply, locals compete fiercely for land to build homes. In years gone by, these land buyers would likely be shopping for an existing house, but given the persistent lack of housing inventory, many opt to buy land and start from scratch.

Real estate pros report that land prices have doubled in some sections of the Hamptons. Few lots are priced under $1 million, and waterfront property usually costs orders of magnitude more.

Whether you’re in the market for a second home or a complicated land investment, the Schiaffino Team can guide you through the process with unparalleled insights into Hamptons luxury real estate. Lori Schiaffino has more than 25 years of experience as a real estate advisor for high-profile clients worldwide. Every agent on her team is a Hamptons expert, and, in 2021, the Schiaffino Team had the distinction of being ranked eighth in New York State by the Wall Street Journal. Contact the team today for your next dream home in the Hamptons! Experience the exceptional service provided by one of the top real estate agents in The Hamptons.

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All with extensive business experience, the Schiaffino Team brings a wealth of local knowledge and understanding of the Hamptons’ real estate market.