Home sales hit seven-year high in New York beach retreat of Hamptons
Home sales in New York's Hamptons, Wall Street's favoured beach retreat, jumped to a seven-year high as buyers rushed to secure deals before expected increases in prices and mortgage rates.
There were 675 purchases in the three months to June, up 25 per cent from a year earlier and the most since the second quarter of 2006, when home values were climbing toward their peak, according to a report by appraiser Miller Samuel and brokerage Douglas Elliman Real Estate. Buyer competition for a small inventory of listings pushed the median price up 8.2 per cent to US$920,000.
Paul Brennan, Douglas Elliman's regional manager in the Hamptons, said: "People are saying, 'If there's a time, now's the time'. Interest rates are probably the driving force. Everybody from Bernanke on down are making gestures that these rates can't last forever."
Mortgage rates have climbed from near-record lows amid expectations that the Federal Reserve, led by chairman Ben Bernanke, will scale back bond purchases as the US economy returns to health. Buyers lured to the Hamptons, where prices have climbed 36 per cent from a low in 2009, are also rushing to beat competitors to purchase a home as the supply on the market dwindles, according to Jonathan Miller, president of Miller Samuel.
The number of properties listed for sale in the quarter fell 13 per cent from a year earlier to 1,573, Miller Samuel and Douglas Elliman said. The Hamptons, a group of villages and hamlets on the eastern end of Long Island, is traditionally a second-home market.
The absorption rate, or the amount of time it would take to sell all the properties at the current pace of deals, was seven months, the second-fastest in more than six years of record-keeping. The rate was 10 months a year ago.
"The market is moving faster because you have more people looking at fewer products," Miller said.
Sellers in the Hamptons aren't listing their properties quickly enough for eager buyers, according to Miller. Owners who bought during the peak, when the median price reached US$1.1 million, may not have enough equity to sell now so they're waiting for values to climb further, he said. "Your job is fine, your income is fine," Miller said. "The numbers just don't work for you to sell so it's not in your plans. Story over."
Freddic Mac says the average rate for a 30-year fixed mortgage climbed to a two-year high of 4.51 per cent earlier this month after reaching a near-record low of 3.35 per cent in early May.
Purchases for less than US$1 million accounted for 55 per cent of all deals in the second quarter, Miller said.
The median price for luxury properties, the top 10 per cent of all deals, fell 19 per cent to US$5 million, according to Miller Samuel and Douglas Elliman. There were 33 purchases for US$5 million or more, down from 38 in the second quarter of last year.
The quarter's most expensive transaction was the US$25 million purchase of a 7,207 sq ft waterfront home in Southampton Village, according to Miller and property-listings website StreetEasy.com
In Southampton Village, US$136.2 million worth of properties changed hands in the quarter, more than double the amount from a year earlier, according to a report by Town & Country Real Estate.