- Median home prices in the Hamptons, a favorite getaway of Wall Street, fell by 6.3% in 2022.
- Fourth-quarter sales dropped by more than half from the same quarter a year earlier.
- Although inventory rose, it remains historically low.
Housing sales in the Hamptons, a second-home getaway for Wall Street workers at the eastern end of Long Island, fell to the fewest since the Great Recession after a dismal year for financial markets threatened to slash bankers' bonuses.
Just 251 homes sold in the fourth quarter, down 53% from a year earlier, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. In the luxury market, defined as the top 10%, there were just 26 sales, a drop of 52% from the fourth quarter of 2021.
"Remembering that 2021 was a rocket ship, sales have overcorrected,” said Miller Samuel President Jonathan Miller. “It’s not a traditional housing market, it’s largely a second-home market. We usually see a fairly robust fourth quarter, because this is largely a discretionary purchase market.”
The last time sales were this low was 2009, in the aftermath of the collapse of investment banks Lehman Brothers and Bear Stearns.
Demand in the Hamptons market is driven mainly by Wall Street bonuses, which are forecast to drop by as much as 45% after a year in which volatile markets, high inflation, and the threat of a recession led to a dropoff in stock and bond sales, as well as mergers and acquisitions.
The median sales price was down 6.3% year-on-year to about $1.3 million. The median sales price in the luxury market was down 16.5% year-on-year to $6.725 million.
While the inventory of homes for sale rose about 12% from a year earlier, it was still the third-lowest on record. With so few homes available to buy, one in five sales in the quarter resulted in a bidding war.
“Inventory right now is less than half what it was pre-pandemic,” Miller said. “We have this dual cause in reduction. One is chronically low supply, combined with the doubling of mortgage rates since the end of 2021.”
In the single-family market, the median price fell 10% to $1.35 million. The sale price of condos fell 9% to $762,000.
Bucking trends of single-family and luxury homes in the Hamptons, condos were on the market for shorter periods of time, down to 79 days in the fourth quarter of 2022, compared with 134 days in 2021.