The Hamptons real estate market has experienced an unprecedented boom . The demand from high-end buyers seeking spacious, safe havens to own instead of rent has driven this surge. With inventory quickly being snapped up, sellers are finding an opportune moment to list their properties.
“If I were a seller, there really is no better time to sell than I can possibly imagine,” said Ginger Thoerner of the Clark + Thoerner Team with Sotheby’s International Realty in the Hamptons. “I’ve never seen a more frenzied market—we saw around $5.5 billion in sales in 2020, more than 2018 and 2019 combined.” The rapid decline in listings has brought inventory to record-low levels, a significant issue across all price points, Thoerner added.
The demand varies by price range and property type, but even previously unsold properties have been sold over the past year. “2020 took a lot of inventory off the market that had been sitting for some period of time,” said Tim Davis, a Southampton-based Corcoran broker. “It was a cleansing of the market, if you will.” Bidding wars have become common, driven by low interest rates and a tight rental market. “Probably 30% to 40% of listings have gone into bidding wars,” said Hara Kang of the Hamptons-based Atlantic Team at Douglas Elliman. “After one week we’ll have three to five offers bidding for a property. It’s not a great time to be a buyer, but it’s a fantastic time to be a seller.”
Despite the favorable conditions for sellers, some are hesitant to list due to concerns about finding another home in the Hamptons. While buyers are still unwilling to meet overly ambitious listing prices, the biggest obstacle for sellers is the question of whether they’ll be able to find another property to move to, not whether they’ll get a good price for their current home.
Here’s what to know before diving into the frothy Hamptons sellers’ market:
Inventory Is Likely at a Low Point
The staggering lack of inventory is a significant factor working in favor of would-be Hamptons sellers. “Last year pretty much wiped out all of our inventory,” Kang said. This is particularly true in certain price points. “The most difficult price range to be in as a buyer is between $5 million and $10 million,” Kang noted. “From Montauk to Southampton there’s nothing. Sellers [in that price range] are just not pulling the trigger, and they have nowhere to go for the year unless they want to downsize or upgrade. I tell them, ‘you may want to wait until the fall to find something.’”
The current inventory shortage could benefit sellers with older properties, provided they’re willing to be flexible on price. Throughout the pandemic, demand has been strongest for new construction and turnkey properties, but the lack of other options may make buyers consider fixer-uppers they might not have previously considered. “Once the new construction was absorbed [last year], people went back to [re-sale] inventory,” Thoerner said. This shift meant that even homes that had previously languished found buyers. Some listings that have sold “dated back to 2015, stuff that was just lingering on the market, either it was overpriced or just needed a lot of work.”
A flurry of new development is currently underway, which could increase competition among sellers later on in the year. As the market evolves, sellers sitting on older properties may find it advantageous to list sooner rather than later, taking advantage of the current demand and low inventory levels.
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