As summer approaches, Hamptons real estate is on everyone’s mind. If the weather during the winter was any indication, 2012 promises to be a hot summer. And in the more figurative use of the word, the real estate market also seems to be headed in that direction.
“I wouldn’t be surprised if, at the end of the year, sales were substantial and rentals were just OK,” says Andrew Saunders, founder of Saunders & Associates, a concierge real estate service. Saunders has been involved in the Hamptons real estate scene for over 15 years, and he has built his company, which prides itself on supporting its brokers, to become one of the most successful firms on the East End.
Saunders, who sees the 2012 market as being very healthy, points out that the sales and rental markets have an inverse relationship. When the sales are strong, as they are today, the rental market loses a bit of steam. And vice versa.
“This could be our best selling season in five or six years,” said Saunders. However, despite the market’s strength, Saunders is also quick to point out that it is still influenced by outside events, and as such is always vulnerable. Prior to 2008, the Hamptons were not as impacted by macro, external events as they are today. But the “flash crash” of 2010 and the U.S. credit downgrade in 2011 had a significant and negative impact on Hamptons real estate transactions.
“Any event that undermines confidence (in the market) will undermine Hamptons real estate,” says Saunders. This year, however, the strength in buying is a telling sign as to the strength in the market that hasn’t been seen in years.
“All areas of the market are selling, which is the definition of a healthy market,” says Saunders, who sees activity in both the extreme luxury properties and the more popularly priced pieces. The upper echelon of buyers seems to be leading the charge, and there is extraordinary strength in high-end users, particularly the professional investor class. However, the majority of transactions in the Hamptons are $2 million and under.
And, as per usual, Saunders affirms that South of the Highway is still the place to be, particularly Bridgehampton South, Southampton South, Wainscott South and Water Mill South. But if any place rises slightly about the rest, it’s Sagaponack South.
“People who have a really big budget tend to gravitate to something different than a village,” says Saunders, referring in particular to the landscape of places like Sagaponack. “They want something that is less closed-in, with wide open spaces and fields.”
As to the type of places that sell well, Saunders emphasizes that the product needs to be well-conceived, well-executed and well-priced.
“Some developers make the mistake that it’s all about a formula out here,” says Saunders. A project needs a sense of style, and can’t just look like it was pre-designed. At the same time, that doesn’t necessarily have to mean that the product carries a substantial price tag, relatively speaking. But it does need to be great for what it is.
Traditional homes still rule the lay of the land, but the instance of modern design is increasing, particularly with oceanfront or waterfront homes. However, not everyone’s perception of “modern” design is the same. Within the genre, there are so many things that people can do.
As the future of Hamptons real estate increasingly shows conviction, it seems that buyers and sellers will continue to believe in the viability of having property on the East End.