On the whole, few things are a given in real estate, but at the moment, luxury markets like the Hamptons are as close as one can get. It and similarly priced markets throughout the region remain the silver lining on the dark cloud that hangs over the economy. You may ask, how can this be? So long as there is a Wall Street, the Hamptons housing market will be alive and well—its stark contrast to the rest of the market has people talking.
Recently, statistics released by Hamptons based Town & Country Real Estate for the third quarter were proof positive that the housing market in the Hamptons is all but bulletproof when it comes to the ebb and flow of the economy. The report indicated that it is the super luxury homes—with a cost of $5 million and above—that are driving the market. If it were any other Long Island market, that kind of money would get you the home on the hill. But in the Village of East Hampton, that was the median home sales price for the third quarter of 2011. Recession? What recession?
Speaking with market experts, it seems that when investment seas are rough, one of the safest places to put one’s money is in high-end real estate, whether it’s in Aspen, Colorado, New York City or the Hamptons. In regard to the latter, Town & Country CEO Judi Desiderio noted now is the time to buy, given the combination of lower prices and the traditional safety of investing in the East End. It’s a place to invest to avoid the pendulum effect that has a hold of the stock market. And when an economic calm finally takes hold, home values will begin to escalate, luxury market included.
If maintaining liquidity is a priority, that’s ok too, as interest rates for 30-year mortgages remain at record lows—under 4 percent. Ask anyone who was in the market in the late 1970s and early 1980s about the current interest rate and wait for the disbelief.
Speaking of disbelief, one could wonder whether it is only a matter of time before the high-end markets experience the same fate as those lesser priced. Fortunately that will not be the case, at least on Long Island, due to the market’s smaller size and limited number of availabilities. In fact, the current set of circumstances point to a strong beginning for the Hamptons and all of the Island’s luxury markets in 2012. Though it’s cold out now, better start looking for that summer getaway before it gets too hot in the Hamptons.