As Labor Day approaches, summer in the Hamptons is winding down, but that also means sales season is generally heating up again. The last few months have been difficult with an increase in inflation and, consequently, in interest rates. There is a definite slowdown in the real estate market due to the frenzy of the COVID-19 pandemic. Prices have remained at record highs, but the number of days ads are on the market has increased. As we head into the fall sales season, we asked some of the top Hamptons and North Fork agents what advice they have for buyers in today’s market. Do buyers need to adjust their buying goals? Or do sellers need to be more realistic about pricing?
Judi Desiderio, Town and country real estate
“Due to many circumstances – many of which you point out – the Hamptons real estate markets have taken a well-deserved summer vacation. After more than two years of a breakneck pace due to the pandemic, sales trends appear to have returned to a July is historically the second slowest month – just behind January – but the second week of August, open houses see better attendance and sales appointments are followed by offers to buy. Considerable pandemic-fueled trading is behind us, but very low inventory in many markets is helping to stabilize prices.Buyers and sellers are both feeling the transition from a market of strong sellers to a more balanced market. : It is important to keep up to date with post-COVID offers when pricing You should always make your home as attractive as possible to maximize r your return – most shoppers want to walk in with their toothbrush – so it’s optimal to have it ready for purchase. Buyers: More stock usually hits our markets at this time of year, but beware. . . you are not the only buyer at the table. Unless of course you’re looking at $100 million homes. Remember: the only constant thing is change!”
Gary DePersia, The Corcoran Band
“My advice to buyers: stay optimistic. There’s a home for you in the Hamptons, whether it’s already built or under construction. Find a broker you like to guide you through the process. Keep an open mind about what you are going to watch. Buyers don’t need to adjust their buying goals at all. It is still a market where demand exceeds supply. The idea of trying to “steal” a property is probably unrealistic. Be diligent in your search. Let your broker know about anything you see online for their opinion. Check out a variety of options in person – you may find that these homes exceed your expectations of what you see online. Sellers should study actual inventory that has recently sold and use that to determine pricing. Think carefully about what it would take to accept an offer. If your price is light years away from that number, maybe adjust your expectations. If you’re not getting exposures or offers, you’re probably over the mark. The market is very efficient. It will guide you to the right price if you are careful and have the right broker.
Sara Goldfarb, OFFICIAL Hamptons
“Don’t be discouraged by negotiations and contract closing times taking longer than expected – many sellers need to revise their expectations of where the market is today from what it was just a short time ago. four or five months. What was once two to three days to contract is now two to three weeks, sometimes longer. Your agent, alongside the seller’s agent, should be able to navigate these discussions based on market data, which is readily available to everyone. But don’t sit on the sidelines waiting for prices to drop significantly – we’re heading towards a new normal, but that doesn’t mean 2018/19 prices at all. Also, demand still hasn’t caught up with supply, so we still see multiple auction scenarios. Make the offer – or someone else will.
Eve J. Combemale, Sotheby’s International Realty
“Buyers reading the national news and anticipating dramatic price declines may need to adjust their expectations. As inventories slowly rise, demand still exceeds supply. we always see competition for prime properties in prime locations Buyers remember: if you fall in love with a property that has just come on the market, chances are someone will another feels the same, so be prepared to act quickly. That means having finances in order and being educated about the market. See everything you can to understand the value and feel confident to pull the trigger when the right one pops in. All cash is always best, but if you’re going to fund, consider putting down a larger cash deposit and definitely have a pre-approval ready. tion. Try to make a clean offer with no contingencies and be flexible with closing dates and terms to attract the seller to your transaction. I would caution sellers against stretch pricing that might have worked during the COVID frenzy. Most buyers are impatient but are no longer willing to pay too much.
Timothy O’Connor, Brown Harris Stevens
“As summer draws to a close, everyone is hoping for more inventory to hit the market; supply is a major challenge we have faced over the past few months. For buyers, I recommend that they are ready to act quickly when a property comes on the market and have all their finances in order while having started a conversation with a local lawyer.I also recommend buyers to submit offers all in cash without financial contingencies when this is possible, bearing in mind that they can always finance at closing.For sellers, I highly recommend putting a property on the market that is priced to sell, not an inflated number.Most buyers are knowledgeable about prices, listings and if the home was recently purchased during the pandemic A buyer will not pay a premium in this market and my goal is to educate a seller so that e his property moves rapidly during the sale process.
Adrianna Nava, Compass
“Buyers should not be afraid to act when they find the property that meets their needs and especially their desires. Inventory, while growing, is still low relative to a flat market and it could be a while before something like the one you want becomes available for sale. Sellers with timing targets should set realistic prices based on comparable properties recently sold. The Hamptons is a unique real estate market because there is often a value placed on the enjoyment of property and that is a subjective value. The best strategy for buyers and sellers in a transitioning market is to listen to feedback and be prepared to compromise with the other party if necessary.
Constance Porto Douglas Elliman
“With the market frenzy due to COVID behind us, there is definitely a different climate in real estate. Although we have much more inventory than we had during this time, we are still under availability. In a normal market, we would see close to 300 homes on the market. During COVID we were in our twenties. Now we are just over 60 homes on the market in Hampton Bays. We still have a lot of activity with buyers. I think it’s because they’re trying to get in before rates go up even more. We see price adjustments in the market, but not extreme. I think sellers should consider offers when they are lower than the listed price. We are not getting a high volume of oversupply as interest rates have gone up. I also think buyers should seriously consider buying now rather than later, as interest rate increases are likely to be much larger than any drop in home prices in the Hamptons.
This article appeared on the cover of the September 2022 issue of Behind The Hedges. Read the digital version here. Also, be sure to check out past columns from the Real Estate Roundtable.