The average price for a house in the Hamptons just hit a record $3 million

The average price of a Hamptons house hit a new record of $3 million during the first quarter. This highlights the shortage of beachfront homes and the strength of wealthy buyers.

According to a report by Douglas Elliman & Miller Samuel, the average sale price of the New York beach communities jumped 18% to $3.1m in the first three months. The average Hamptons price is now over $1 million more expensive than Manhattan's average sale price. Miller Samuel says that this is the biggest gap between the markets since 2005 when data began to be collected.

The increase in demand is due to the shortage of Hamptons homes for sale and the high level of interest from wealthy buyers who are looking for real estate on the sought-after island. Brokers report that the wealthy continue to bid and buy despite volatile stock markets, rising mortgage interest rates, layoffs and recession fears.

Todd Bourgard is the CEO of Douglas Elliman Long Island, Hamptons, and North Fork. He said, "We have more sellers than buyers." The buyers are out there.

Hamptons' high-end market is strongest. The luxury market, which represents the top 10% in sales, has seen both median and average prices break records. According to Jonathan Miller CEO of Miller Samuel, the average luxury price increased by 33%, to $16.1million, during the first quarter.

Miller stated that bidding wars accounted for more than 14% (or sales) in the luxury market.

He said that "the high end is unfazed in a certain way." "There are people making decisions without much regard for the macro-environment."

East Hampton, New York. A view of a beachfront residence.

Reuters

In the Hamptons, there were a few mega-homes sold in the first three months. In March, a 6.7-acre East Hampton estate sold for $91.5m. This is more than double what it was sold for in 2020. Bernie Madoff's former Montauk home of 3,000 square feet sold for $14 Million. Brokers say that a modern 5,500-square-foot oceanfront house in Bridgehampton, sold off-market for about $35 million.

Even small Hamptons homes are fetching high prices. A mobile home sold in Montauk Shores for $3.75m.

However, the lack of available homes has resulted in a dramatic drop in total transactions. Miller Samuel reports that sales volume dropped 57% in the first quarter to its lowest level in fourteen years. Miller Samuel said that while the number of homes listed has increased by a third from the first quarter 2022, the inventory is still less than half of the pre-Covid level.

Brokers say that the majority of current listings are priced too high, resulting in a reduction of homes for sale. Brokers report that wealthy buyers are still in high demand, but they have a strict price policy and won't pay prices as high as those of 2021 or early 2022.

Miller stated that "a lot of properties on the market today aren't priced correctly."

If more homes are put on the market, brokers say that sales may pick up this summer.

Bourgard: "I think that the market will strengthen as we move into spring and into summer."