The numbers are good. New home sales hit a five-year high in June, and sales of previously owned homes were up from a year earlier. With some experts predicting year-over-year increases of anywhere from 6% to 12% by the time 2013 comes to a close, the U.S. housing market continues to recover, and the East End market is enjoying a rejuvenation as well. Reflecting on a summer that saw significant growth and positive changes for the industry, a number of local experts are making sunny predictions for the fall.
“It appears that buyers are poised to take advantage of all opportunities the market has to offer, regardless of the season,” says Ernie Cervi, Corcoran’s Executive Managing Director in Bridgehampton. “The number of sales across all price points and locations this summer [was] staggering. Buyers have come out in record numbers to invest in East End real estate. Confidence in the East End real estate market is obvious.”
Geoff Gifkins, Hamptons Regional Manager of Nest Seekers International, agrees. “We have seen one of the most active summers in many years in terms of both sales and rentals,” he says, “with all sectors of the market moving.”
Moreover, this is true at all price points. John Gicking, Vice President of Sotheby’s International Realty in East Hampton, sees strength throughout the price spectrum. Sotheby’s had the second highest-priced single-home sale in the history of the Hamptons this summer, brokering a $60 million property on Further Lane. Still, “at the opposite end of the range,” he notes, “buyers continue to snap up houses under $1 million, to take advantage of historically low mortgage rates.”
Those rates have been moving up as summer gives way to fall, however, sparking purchases among those buyers who believe the rise will continue and the time to get in is now. Gicking notes the importance of paying attention to those rates, as interest-sensitive buyers will act quickly to capture them. “Smart investors who monitor macroeconomic conditions of the country understand that the overall real estate market is on a rebound. That confidence will spur them on,” he notes. “We are very optimistic about the rest of the year and 2014.”
BUYERS AND BIDDERS
“Buyers are looking for lifestyle and quality,” Gifkin says of the prominent trends he has noticed of late. He mentions the new high-end condo developments in the area that have been selling very quickly, as “new construction and key locations will always be in demand.”
That increasing demand can be taken as another sign of the continuing real estate recovery. “The builders who have made it through these really tough times all seem to be doing very well,” says Ken Yerves, Primary Builder and President of Montauk Homes. “I have more work scheduled this fall than I have in five years.”
That may continue across the industry as many buyers “are intoxicated by the ease of moving into a brand new house,” Gicking states. Because there is no need for renovations or updates, this has pushed up prices of newer homes. But if you don’t mind more of a project, he adds, you can get ahead of the game by restoring an older house here on the East End.
Both Cervi and Gicking emphasize the bidding wars that increased in the Hamptons over the summer, among all price points except for homes that were overpriced. Cervi explains, “Properties that were priced properly found multiple buyers across the board, to the point that properties were selling above the asking price.”
Gicking echoes the sentiment. “We continue to see strength across the board on houses in good locations which are priced correctly, with multiple-bid negotiations in all
When a house is priced too aggressively, however, buyers notice. “Buyers in this market still won’t overpay for a property,” Cervi continues. “Sellers that overpriced their properties didn’t have multiple bidders, and many times no offers at all.”
This fact leads Gicking to talk about pricing strategy. “The strategy of pricing high and waiting for someone to make an offer is not working,” he says. “Buyers avoid properties where sellers appear unmotivated, and jump at properties where they perceive value.”
And that search for value is not going to slow any time soon, it appears. Gifkins envisions that “we will have a very strong sales push in the fall, with many qualified buyers currently looking,” he says. “The market is very active, with both sales and even early summer 2014 rental inquiries.”
It’s never too early to start thinking of summer again.