Hamptons home prices ticked up in the third quarter over last year, according to two reports released Thursday, paced by a robust rise in the price of luxury homes.
However, the median sale price in the luxury market—defined in the Hamptons as anything above $2.8 million—hit $4.45 million this quarter, a 14% jump from a median of $3.9 million a year earlier, according to brokerage firm Douglas Elliman. That compares to a miniscule rise of less than 0.5% for the overall market, according to Jonathan Miller, CEO of Miller Samuel, the firm that prepared the report.
But even as prices rose at the top end, so did shoppers’ urge to jump into the market, which drove the number of sales up to 52 in the quarter, a jump of 27%. In turn, the potent combination of rising sales as well as prices, prompted more sellers to put their homes on the market, driving inventory up 123% over the same quarter last year. Miller said that supply had been extremely low over the past few years, and the jump signified more of a return to normal.
But looking forward, the larger number of properties on the market should begin to temper the same rise in prices that kicked off the growth in the first place.
“The market is sort of self-correcting,” Mr. Miller noted. “The supply, in response to the rise in price, is keeping prices from rising too quickly and that is a good sign for market stability.”
The hottest neighborhood for Douglas Elliman was Wainscott. There two homes sold for an average of about $12 million, followed by East Hampton, where the brokerage closed deals on eight properties for an average of $10.5 million, according to the report.
In the broader market median prices were depressed in the quarter by the large number of homes that were sold on the lower end of the cost spectrum, contributing to the highest quarterly sales numbers in eight years.
Mr. Miller partially attributes the rush on the more affordable homes to a spike in interest rates in May, and fears they will climb even higher.”You had a surge of people come who were on the fence and entered the market to finally buy,” he said.
The Corcoran Group reported similar gains in its 3Q report. In the luxury market, the firm charted a 29% increase in average median sales prices, and broker Ernie Cervi said few factors lead him to believe the area will cool off any time soon. At the end of the third quarter last year, the median price tag was about $4.5 million, while this quarter it hit $5.8 million.