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The New York Times:


Renting or Buying, Hamptons Feel Pinch

Published: April 9, 2009

Ashley Gilbertson for The New York Times

Jay Litvack held off making a deal for his house in East Hampton and saved $475,000.
Late last month, a tenant whose identity is cloaked behind a confidentiality pact agreed to rent Ms. Corzine’s place through September. “In terms of available rentals it stood out,” said the listing agent, Beate Moore of Sotheby’s. Built in 1990, the traditional-style Sagaponack house occupies 6.6 acres and has landscaped lawns, a tennis court, a gym and 500 feet of ocean frontage.

Even in a recession, it seems, the Hamptons still manage to attract the kind of people who do not flinch at spending nearly $6,600 a night on rent. And multimillion-dollar homes continue to sell, especially in the more desirable areas south of Route 27.

At the same time, however, a cloud of gloom has pervaded those thick Hamptons hedgerows. During the first quarter, the number of leases signed and the dollar volume of sales shrank to half of the levels from the similar period last year, said Rick Hoffman, the regional senior vice president for the Corcoran Group.

Prospective tenants who might have felt pressure to snag a house by Presidents’ Day are starting their search later, figuring that rents will drop as the summer approaches, agents say. Clients who used to lease a house from Memorial Day to Labor Day are now settling for a month, or — in a phenomenon rarely seen before in the Hamptons — even a week or two.

“In the 20 years I’ve been doing this, this is the weakest rental market I’ve seen,” said Jan Robinson, the owner of Hampton Homes, a local brokerage. Ms. Robinson said her rental business was down by 70 percent from last year.

Last year, a Manhattan couple, Joshua Levine, 33, and Leigh Manheim, 31 — he works in finance, she is in fashion — had only three rental houses to choose from in their price range of around $30,000. But on a recent Saturday, they toured 11 houses, winnowed from a list of about 30, all with four bedrooms and a pool.

The next day Mr. Levine and Ms. Manheim, who will be sharing the rental with two other couples, heard about another house that rented for $40,000 last year and could now be had for $10,000 less. They took it. “We got double the house we got last year,” Mr. Levine said. The house has a living room with cathedral ceilings and access to a community tennis court.

Owners who are willing to be flexible have a better chance of finding renters, agents say. Ms. Robinson, for example, found a tenant to rent an East Hampton house for two weeks, half the term the owner was looking for.

One house in Westhampton Beach that was listed for $50,000 a month for July and August was rented when the owner accepted an offer of $75,000 for both months, said Judy Carroll, an agent at the Marketplace, a family-owned brokerage based in Westhampton Beach.

Owners are making other concessions — like extending the lease through the end of September, say, or agreeing to absorb landscaping costs. One house rented after the owner covered the furniture with white slipcovers, said Susan Breitenbach, an associate broker at Corcoran. Many owners “are spoiled,” she said. “They are not used to having to do stuff like that.”

Since sales have slowed, some of the high-end homes that were built on speculation and would have sold briskly in a stronger market are being furnished and marketed as rentals, Ms. Breitenbach said.

The slowdown in the rental market is mirrored in the sales market, where prices have dropped to 2006 levels. Preliminary first-quarter data from Corcoran shows that median prices have declined by about 20 percent over the same period last year, Mr. Hoffman said. In 2008, the median price for homes on the South Fork (including the Hamptons and Shelter Island) was $891,000, according to Corcoran.

In the first two months of this year, 60 sales were recorded in the Hamptons, compared with 107 in the first two months of last year and 330 in the similar period in 2007, said Susan Vincennie, general manager of Long Island Profiles, a company in Brightwaters, N.Y., that publishes recorded real estate information. The median price of homes sold in January and February of this year was $675,000, compared with $840,000 in January and February 2008, and $999,000 in the 2007 period, she said.

Inventory has increased 6 percent since the first quarter of 2008, according to Mr. Hoffman.

Some buyers are finding bargains — relatively speaking. A Mediterranean-style house on Cobb Road in Water Mill with five bedrooms went on the market two years ago for $7.6 million. Two weeks ago, it was sold for $5 million, said Chip Dineen, an agent at Sotheby’s, which had the listing. Other houses have sparked multiple bids, including one on Toylsome Place in Southampton with 7,100 square feet that was listed for $7 million. After a series of price reductions, it recently sold for just under $5 million, he said. The winners were so eager to strike a deal that they signed a contract without waiting for a title report or inspection, Mr. Dineen said.

Such sharp reductions suggest that “the property owners weren’t being realistic in their pricing to begin with,” Mr. Hoffman said.

Most transactions are occurring at much lower prices, with 70 percent of the deals under $1 million, he said. Perhaps that’s because financing is harder to come by and the number of all-cash buyers is smaller than it used to be, even in the Hamptons.

That trend is likely to make it tougher to sell houses built on speculation, especially if they are north of the highway, farther from the ocean.

“The days of spec development with extremely large housing is over for now,” said Jonathan J. Miller, the chief executive of Miller Samuel, a Manhattan appraisal company that produces the Hamptons market report for Prudential Douglas Elliman. “Financing for those properties is generally not available, and there is an oversupply and a concern that the demand is not going to be there for a while, given the changing employment structure and compensation in the financial services industry.”

These days, bargain-hunters are often willing to be patient. David J. Raimondo, 47, of Shoreham, N.Y., has been driving up and down Dune Road along the ocean from Westhampton Beach to Southampton for several years, searching for a deeply discounted house. “There’s no rush,” said Mr. Raimondo, a lawyer. “I’m looking to spend between $500,000 and $1.5 million. If it’s $1.5 million and it’s a reduction from $2 million, that might be right for me.”

HOMES listed around $500,000 represent the lower end of the market, and many of the listings at that level have two bedrooms and only one bathroom. A cottage on Parrish Road in Southampton that is listed for $475,000 has three bedrooms and two bathrooms but the kitchen is in the basement.

Though the owner is asking only $23,000 more than he paid for the 1,500-square-foot house, it seemed overpriced to Wendy Reynolds, 33, a seaplane pilot who transports wealthy weekend commuters to the Hamptons. “It’s smaller than some of the others,” she said at the recent open house.

Jay Litvack, a shoe manufacturer who lives in Roslyn, N.Y., said he looked at more than 150 Hamptons houses over the last year. Initially, he intended to spend as much as $1.2 million, but by last year he had settled on a limit of $950,000. A year ago, a four-bedroom house in the Three Mile Harbor section of East Hampton caught his eye, but it had a price tag of $1.3 million. In October, the price dropped below $1 million, and by February he was able to buy it for $825,000.

Like many houses that are selling in this market, it has an updated kitchen and bathrooms. “A lot of houses need a lot of work,” he said. “People today don’t want to do the work.”

Mr. Litvack had no problem getting a mortgage, but 36 hours before he was scheduled to close, his lender, Wells Fargo, asked him to increase his down payment of 25 percent by another five percentage points, or $40,000. Fortunately, Mr. Litvack said, he was able to come up with the cash.

But for other potential buyers, the lending terms may be too onerous. “Thirty percent down is a lot for people to come up with in this marketplace,” said Ms. Robinson of Hampton Homes.

Still, Gary Wohl, an agent at the East Hampton office of Brown Harris Stevens, said he remained optimistic that the market would pick up. “There’s a lot of value here right now,” he said as he showed off a 5,000-square-foot spec house on a quiet East Hampton street whose price has been reduced to $3.7 million from nearly $4 million. But people with unrealistic expectations are bound to be disappointed, Mr. Wohl added.

“It’s never going to be a fire sale out here,” he said.





SLASHED: This Bridgehampton property once rented by Kelly Ripa has been cut from $230,000 to $175,000.

May 11, 2009

It's a scramble to the sand.

With nervous East End landlords desperate to generate income this summer, bargain hunters are suddenly hustling to take advantage of discounted prices and unusually flexible terms in the rental markets.

Even luxury spreads that had hosted celebrity renters like Kelly Ripa and Lindsay Lohan in years past are still languishing on the market and have slashed their asking prices.

Ripa's old Bridgehampton pad has been cut from $230,000 to $175,000, and a former Lohan compound in Wainscott slashed $50,000 from its $300,000 tag.

"Renters are expecting discounts," said Jan Robinson of Hampton Homes. "Depending on their situations, I think owners are willing to take a lot less this year."

Brokers said that the flat-lining rental market has been rejuvenated in recent weeks as bargain hunters have come off the sidelines to lock up attractive deals.

"I think the last two weeks have saved the year," said Andrew Saunders of Saunders and Associates. "We've seen a lot more activity recently."

With their unsigned leases collecting dust, jittery Hamptons landlords have -- for the first time -- offered monthly packages instead of the traditional season-long deals.

"It's the first time I've seen it in my 27 years of doing this," said veteran broker Judi Desiderio of Town and Country Real Estate. "It seems like people are not renting for as long as they normally would this year."

One Wall Streeter who usually rents for the season said he opted for a $50,000 August lease this year in Amagansett.

"It's not that the income isn't there," he said. "I have the same job I had last year and the same amount of money coming in. But the cushion, the savings, is not the same."

Desiderio said that many Hamptons renters from the financial sector have simply waited to make their entry into the summer rental rush.

"I think people feel like things are going to be OK [on Wall Street] and now they're coming out," she said.

This year's chaotic rental climate has even led to some unprecedented legal wrangles between tenants and owners.

Some landlords who rented their spots on a monthly basis have suddenly fielded seasonal offers during the rush of the last two weeks.

"They're trying to get out of those leases now," Desiderio said. "It's an unusual situation.


May 19 (Bloomberg)


Hamptons Homes Drop Most Since Realtors Kept Records

By Oshrat Carmiel

Sculptor Fredi Cohen expected the hand-carved sinks and tubs in her East Hampton, New York, home to stand out in the real estate market and help sell her three- bedroom house for $1.25 million.

Almost two years later she’s still waiting.

“People have stopped buying real estate,” said Cohen, who designed the kitchen and bathroom tiles herself. “Now I would sell it for $999,000.”

The number of unsold homes in the Hamptons rose 15 percent to a record 1,673 in the first quarter from a year earlier, according to data compiled by New York-based appraiser Miller Samuel Inc. Sales have declined the most in the 27 years that broker Town & Country Real Estate has kept records for the Long Island beach towns about 100 miles east of Manhattan.

The inventory of Hamptons’ homes would take 34 months to sell at the current pace, Miller Samuel reported, or more than three times the 9.8 months’ supply of existing homes in the U.S. as tracked by the National Association of Realtors.

Wall Street bonus cuts and job losses have resulted in fewer buyers in a community that has attracted Hollywood celebrities such as Sarah Jessica Parker and financiers, including Blackstone Group LP Chief Executive Officer Stephen Schwarzman.

Hurricane Katrina

“This isn’t like your typical Nor’easter where a tree falls and your lights flicker,” said Michael Daly, founder of the buyers’ brokerage True North Realty Associates in North Haven, New York, and a Hamptons real estate blogger. “This is more like a Katrina,” he said, alluding to the historic 2005 Category 5 Hurricane. “It’s going to be a number of years before the market recovers.”

Sales in the Hamptons plunged 67 percent in the first quarter from a year earlier, according to a report by Town & Country. It was the biggest percentage drop in records dating to 1982.

The median price dropped 28 percent from a year earlier to $698,461, mostly on a decline in sales of $5 million or more, Town & Country said. The total value of all Hamptons real estate sold in the first quarter fell 78 percent to $140.2 million.

Miller Samuel put the first-quarter median price at $675,000, down 23.5 percent from a year earlier. Inventory is at a record for the three years Miller Samuel has data.

As prices fall, buyers are searching for deals and sellers are offering discounts, according to Judi Desiderio, president of Town & Country in East Hampton, New York.

“The sellers are keenly aware that if they haven’t sold in a better market, they really need to adjust their prices,” Desiderio said.

North Fork

Susan McGraw Keber is witnessing the market from both sides.

Keber, 54, a broker for Town & Country and a model who appears in Target Corp. and Macy’s Inc. advertisements, has been trying to sell the Bridgehampton home she shares with her husband for the past year.

The couple wants to build on waterfront property on Long Island’s North Fork, an area of vineyards and beaches across the Peconic Bay from the Hamptons.

They initially priced their 2,400-square-foot home on Halsey Lane, a half mile from the ocean, on the “higher end,” at $4.55 million, Keber said. The four-bedroom house on an acre of land includes cathedral ceilings with skylights, a heated pool and fireplace. The price was based on sales south of the Montauk Highway in recent years.

“Now we’re more serious,” Keber said.

Collapse of Lehman

The couple cut the asking price to $3.95 million in April. They had been willing to rent it for the summer for $125,000 -- the same amount it went for the last three summers. Now they have pulled the property off the rental market because the offers they received were too low, Keber said.

Casual deal seekers still show up at open houses and sizable price cuts can result in offers -- even bidding wars, said Jan Robinson, president of Hampton Homes Inc., a broker in East Hampton.

When Jay Litvack, 58, an executive at a women’s footwear company, began his Hamptons house hunting in early 2008, he had a budget of $1 million for a place in move-in condition. As the Dow Jones Industrial Average fell almost 40 percent, he cut his budget to $900,000.

Litvack said he looked at 150 houses and kept his eye on a four-bedroom home in East Hampton with a swimming pool and newly renovated kitchen and floors. The seller wanted $1.3 million in March 2008. The price was lowered to $995,000 after the collapse of Lehman Brothers Holdings Inc. in September, Litvack said.

‘No Market’

The Peters Path property was then cut by another $50,000 and finally reduced to $825,000. Litvack made an offer in October and two other bids came minutes later, said Robinson, his broker.

“I held out and I held out, and then pounced,” Litvack said. “Honestly, I’m shocked what I got it for.”

Price cuts averaged almost 11 percent in the Hamptons this year through May 15, according to data compiled by Sofia Kim, vice president of research for Streeteasy.com, a real estate listings service.

Big Price Cuts

The biggest reduction is for a newly built five-bedroom home in Westhampton Beach with deck views of Moriches Bay, according to Streeteasy. The 4,000 square-foot home on Tuttle Place was reduced 50 percent to $1.6 million, said Eileen Brod, the listing agent from First Hampton International Realty.

The second most-discounted home as of May 15, is a three- bedroom, 1,472 square foot cottage that was reduced 47 percent to its current price of $950,000, Streeteasy said. Also discounted by 47 percent is a 4-bedroom house in Springs that is now listed at $685,000, down from its original $1.3 million asking price.

Vacant land sales have also declined. In the first quarter, 29 residential parcels sold for a total of $19 million, 56 percent fewer properties than a year earlier and 88 percent fewer than the same quarter in 2005, according to Suffolk Research Service Inc. in Hampton Bays.

“It’s a strong indicator for the fact that there’s no market for houses,” said George Simpson, president of Suffolk Research, a real estate data service. “There are enough of them around you’d be crazy to build one.”

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.


FEBRUARY 6TH 2009 NYBLADE Lessons From The Hamptons
After two decades of wear and tear, this real estate agent earned some sage insight.


By Jan Robinson

In 1989, I left Manhattan and bought a catering business in East Hampton. After the first summer feeding 600 hundred people every Saturday night, the allure of the food business was gone.

Not wanting to return to corporate life in New York, I decided to get my real estate license. My friends thought I was nuts—the market was bad, and no one was buying. But having 20 years of sales and marketing experience, I thought at the time that I would treat this as a career, not a hobby.

The Hamptons in the late ’80s was an amalgamation of small resort towns scattered along the beautiful beaches of the Atlantic Ocean from West Hampton to Montauk. Boutiques and small real estate agencies filled the charming streets. The towns attracted local artists and celebrities looking for peace and quiet. Prices to have a piece of this escape were modest. A home could be purchased for less than $200,000.

In 1989, there were few real estate agencies with even fewer agents in each office. Today the streets are lined with corporate ephemera and hundreds of agents vie for space on every main street in every town.

This is my 20th year in business, and I have done rentals, sales and custom construction—whatever I had to do in this ever-changing market.

In 2008, I thought we were going through a cycle similar to the one we experienced in 1989. There are no buyers, but there will be renters. In 1989, I did rentals, and those clients became buyers and custom building clients when the market changed in 1992. Yet, in in today’s market, rental prices are more than double what they were in 1989, and in my opinion, homeowners need to be more realistic in pricing their homes they want to rent them in the upcoming season.

In 1989, renters wanted the full season—Memorial Day to Labor Day. Anyone wanting shorter-term rentals were forced to search out the condominium and co-op units scattered along the ocean. Today, homeowners are happy to do weekly rentals. The rental prices are higher by the week than by the month. So a homeowner can put together several weeks and do as well financially as they would have done renting for an entire month. Real Estate agents have been forced to operate more as management agents instead of merely rental agents. The commissions have not gone up, but the work certainly has.

The Hamptons are a secondary home market. We are driven by Wall Street, and everyone is affected by the turbulence currently shadowing our economy.

Luxury items are the first to go. Therefore, renters and buyers need to be able to rent or buy without feeling that an investment in the Hamptons is an expense they do not need and cannot afford.

There are great deals around—owners who must sell, banks that offer short sales and auctions. At every price point there are properties that three to five years ago sold for 30–50 percent more.

If you are young enough, historically real estate has doubled in value every 10 years. Any investment you make now should be with the intention of holding it for three to five years.

If you have cash and are qualified for the lowest interest rates that we’ve seen in 30 years, now is the time to pounce.

Jan Robinson is president of Hampton Homes. She can be reached at jan@hamptonhomesinc.com or 631-324-0551



The Hamptons: Not Recession-Proof


By Jan Robinson


Jan Robinson and Diva. ©RandyProductions.com

In the 20 years I’ve been doing rentals in the Hamptons, I’ve never seen a season with so little activity and interest in the rental market.

I’m hearing grumbling from both sides of the equation: Why won’t this owner accept this price? Why are the renters offering so little?

On one hand, renters are wary of brokers who aren’t aggressive enough in negotiating deals and encouraging homeowners to accept realistic offers. On the other hand, owners complain that, a week before Memorial Day, their properties haven’t even been shown to prospective tenants. Some brokers try to placate their worried clients by suggesting they hold off accepting low offers for the full season, and recoup some losses by renting only for July and/or August.

Sigh—everyone wants to blame the brokers. So here’s my advice: Drop your prices and they will come!

Now, I don’t have a crystal ball, but I try to be honest with my clients. I wouldn’t advise an owner to turn down a reasonable offer in the hopes of a better one if she could really use the cash, especially in this economic climate.

This is a renter’s market, and if you’ve never rented in the Hamptons before, now is the time to do so. Prices for rentals have dropped 30 percent over the last few years. After Memorial Day, the official start of the season, I think we’ll be seeing prices that have 40 to 50 percent off. As the summer progresses, I predict we’ll encounter more owner offering rentals by the week. In my portfolio, I have gorgeous properties with pools starting at $4,000 a week and homes with pools and tennis courts going for $8,000 and up per week.

The weak economy may be forcing more “staycations” this summer, but you shouldn’t rule out the Hamptons as a getaway destination that’s suitably close to home. The area is a short ride from the city, either by car, jitney or train. No airport delays or security hassles—or top ticket prices—to deal with.

Don’t let celebs and Hollywood carpetbaggers have all the fun—rent a week or two in the Hamptons for a lot less than ever before.

Jan Robinson is the President of Hampton Homes and has worked in Hamptons real estate for 20 years.

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