With
Wall Street booming and stock markets hitting record highs nearly every
day, the real estate trade in the Hamptons could not be better and money
appears to be no object.
Houses
are routinely selling for $10 million (€7.44 million) to $15 million
(€11.16 million), and people do not think twice about shelling out
$200,000 (€148,798) for a 3-month summer rental.
Last
week, it was reported that financier Ron Baron paid more than $100
million (€74.4 million) for a 40-acre (16-hectare) East Hampton property
— no home, just land — located next to his sprawling estate.
"The houses in
the $10-$20 million (€7 to €15 million) range are selling very well,
which, of course, reflects the boom on Wall Street," said Gaines,
who hosts a radio program on Hamptons culture every Sunday from the lobby
of the American Hotel in Sag Harbor.
Going back nearly a
century, the Hamptons — an unincorporated confederation of villages and
hamlets stretching 40 miles (64.37 kilometers) along eastern Long
Island's south shore — has traditionally welcomed the rich and famous
from near and far. Pristine sandy beaches and bucolic country roads have
been a haven for the blue bloods and the wannabes alike, all willing to
plunk down parts of their fortunes on Hamptons palaces, big and small.
Judi Desiderio,
president of Town & Country Real Estate, estimates 75 percent of her
customer base comes from Manhattan power brokers. "As long as the
economy in the city and on Wall Street is doing well, our high-end market
is also doing well," she said.
While the national
real estate market has been described as "soft," the same does
not hold true for Manhattan or the Hamptons, says Stuart Epstein, the
owner of Devlin-McNiff Real Estate.
"If there's an
imaginary bubble over Manhattan, I'd say that bubble extends 125 miles
(201 kilometers) out to the end of Long Island," he said.
By all measures,
times have been very good on Wall Street. The banking sector has been on
a tear, driven by a spate of mergers and acquisitions in recent months.
The Dow Jones is getting closer and closer to 14,000. And Wall Street
paid out about $24 billion (€17.86 billion) in year-end bonuses last
year.
"These
folks," Epstein said, "there's a lot of them, they're making
great money and there are not all that many ways they can spend it."
That cash
inevitably tumbles into the Hamptons as people start flocking to the
beach and boarding the sailboats and yachts this weekend.
Desiderio said many
potential buyers remained on the sidelines the past year or so, but with
the Dow soaring to record highs this spring, sales are beginning to
sizzle.
"We also have
the aging baby boomers who are looking at retirement," she said.
"What better place to retire to than in the country?"
On the rental
front, Paul Brennan of Prudential Douglas Elliman says it's been "a
pretty typical" year.
"Good rentals always go, no matter how much, each year,"
he said. "I wouldn't say prices have jumped significantly on
rentals."
Epstein said the
majority of the houses this summer are renting for between $50,000
(€37,200) and $200,000 (€148,798). For that, you are likely to get a
4,500-square-foot (418-sq. meter) home, with plenty of amenities,
including a swimming pool.
Some fancier houses
have rented for as much as $750,000 (€557,994) or $800,000 (€595,194),
but those are the exceptions. (For the record, an $800,000 (€595,194)
3-month rental comes out to about $8,000 (€5,951) per day.)
When prices climb
that high, many people opt to buy rather than rent, brokers said.
"It's the same
old, same old," says veteran real estate executive Diane Saatchi of
the Corcoran Group. "People are spending an incredible amount of
money to be in the Hamptons. It will be as crowded as ever.
"Naysayers
keep saying, 'it can't last, it can't last,' but every year the crowds
keep showing up and the restaurants are jammed. It's the Hamptons."
