Sub-US$1m homes a draw as Hamptons prices fall
With median sale values down 10pc in a year, one buyer believes his US$490,000 home would have cost US$1 million before the crash
The average price of homes sold in New York's Hamptons, the Long Island oceanside retreat for summering Manhattanites, declined in the third quarter as mortgage rates near record lows focused buyer attention on cheaper properties.
The median price of homes sold fell 10 per cent from a year earlier to US$765,000, according to a report by New York consultant Miller Samuel and broker Prudential Douglas Elliman Real Estate. In the Hamptons and North Fork, the median for luxury properties, defined as the top 10 per cent of all sales, fell 23 per cent to US$4.23 million. About 63 per cent of luxury deals were for properties under US$5 million.
"Multimillion-dollar properties, that's the brand of the Hamptons," said Jonathan Miller, president of Miller Samuel. "But there's an expansion to that, so it's not as one- dimensional as it was during the peak."
Property prices that are 30 per cent below their 2007 peak have drawn new buyers to the second-home market in the Hamptons, according to Miller. Homes priced at less than US$1 million, which draw buyers who rely on mortgages, accounted for 70 per cent of sales in the quarter as borrowing costs approached all-time lows, he said.
The average rate for a 30-year fixed US home loan fell to a record-low 3.36 per cent earlier this month, according to mortgage-financier Freddie Mac.
"If you look at monthly payments on mortgages, the prices have become very competitive with rental prices," said Terry Thompson, a Long Island-based broker with Prudential Douglas Elliman. "Low interest rates and lower-priced homes are giving renters an unprecedented opportunity to own versus rent."
Thompson helped Gennaro Vendome and his wife, Carol, find a four-bedroom home in Hampton Bays for US$490,000, a 4.9 per cent discount from its original asking price, after they decided to sell their second home in Montauk, at the easternmost end of Long Island, after seven years. They chose Hampton Bays after Thompson found a place in the town for their daughter's in-laws for US$615,000.