The so-called “middle class” in the Hamptons – New Yorkers with second homes in the in the $2 million to $5 million range – are frantically slashing prices to offload their properties, real estate sources said.
While choice Hamptons real estate is always highly desirable, agents say prices for homes on the lower end of the spectrum are dropping from pandemic highs when buyers were paying double or triple to snag homes.
“We’re not talking about the ultra-wealthy here – these people are subject to economic norms,” one source said of the non-stratospherically rich. “When it comes to having a vacation home, it’s just not as easy to justify the cost.”
At issue: interest rates – which were close to 3% in 2020 have popped to nearly 8% today. For buyers with 3 or 5 year fixed interest rates, they’ll soon be paying significantly more for the property than they were previously.
Now those prices are dropping. Multiple homes reviewed by On The Money in posh neighborhoods like Sag Harbor and Amagansett have been cut by as much as 20% — shaving hundreds of thousands of dollars off asking prices — in recent months.
As people have migrated back to the city due to revived in-office attendance requirements, carrying two properties has been too much to handle for many pandemic era buys. Employees who are forced to work from the office no longer have the flexibility to work remotely and truly enjoy their costly properties.
“Now that people are back at the office, they don’t need all that space for a ‘Zoom room’,” one source said. “I know a lot of people turning their remote offices in the Hamptons back into bedrooms and putting them on the market.”
While many of them tried to rent homes out during the summer, it was to no avail given the extremely soft rental market. At the same time, Wall Street bonuses have fallen 26% while tech and finance layoffs have forced others to tighten their belts.
Of course on the upper end of the spectrum, there’s still plenty of demand for tony properties.
“There’s a ton of wealth, and people will always want to be in the Hamptons,” David Mazujian, licensed real estate salesperson at the Corcoran Group said. Among those looking to shell out many millions, “there’s a ton of demand.”
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