A property in Palm Beach affords the ability to escape the harsh winters of New York, but the two must-have points of the most coveted property triangle on the eastern seaboard of the USA are Manhattan and the Hamptons. The latter’s incarnation as a playground for the rich and famous has morphed dramatically over the decades from open potato fields into upper-scale seashore hideaways. More than half of the property is made up of second homes and residents of Nassau County pay the second highest property tax in the USA.
The great and the good have long escaped steamy New York City Augusts to cluster in Suffolk County’s main town of East Hampton and the surrounding hamlets of Montauk, Amagansett, Wainscott and Springs. With the Atlantic, Block Island Sound, and Gardiners, Napeague and Fort Pond Bays surrounding it on three sides, this seaside retreat from the Big Apple has attracted the upper crust of American’s political class from Theodore Roosevelt, quarantined in Montauk after returning from the Spanish- American War, to Bill and Hillary Clinton, who summer in a smart Bridgehampton seaside house with a windmill. An artistic edge is lent by a colony that sprang up in the 1940s, including Jackson Pollock, Willem de Kooning, Mark Rothko and Andy Warhol, then attracted others-the Rolling Stones, Liza Minelli, Elizabeth Taylor and John Lennon-from the entertainment industry.
These days, you’re more likely to find captains of industry and their society wives in the Hamptons, points out Kirk Henckels of Savills’ associate Stribling Private Brokerage. ‘It’s basically an extension of socially competitive Manhattan, and size matters. The ultimate prize is a $30 million -$60 million old, waterfront house with several acres.’ Rather than only possessing ‘curb appeal’, any serious property must have ‘aerial appeal’. One property insider insists: ‘Your estate needs to look fantastic from above, as the first view most buyers get is from a private jet or helicopter.’
Purchases are driven by a house’s architecture, provenance and proximity to water, according to Mr Henckels. ‘Security isn’t as big an issue as in Beverly Hills, but buyers like to keep things quiet.’ The irony is they can buy in a corporate name, ‘but, at some point, everyone sees you going to the grocery store.’ He adds that the Hamptons are only a 90-minute drive from New York City, but warns this can become five hours in high summer. Savvy weekend commuters board a Hampton Jitney coach or the Long Island Rail Road, instead of banging their heads with frustration on a log jammed Long Island Expressway.
Although the East Hamptons’ market was harder hit than Manhattan following the Lehman Brothers’ crash, buyers’ interest has perked up now there are more homes on the market and confidence is returning. Prices are still below 2009 levels, and high end homes-those costing more than $10 million-have been particularly affected.
The exception is East Hampton, with a 34% rise in average prices, says a study from the Corcoran Group. The real problem is the wide gap between asking and selling prices, believes Jack Pearson from the Corcoran Group in Bridgehampton. ‘Buyers are savvy about how much houses go for, but a number of sellers aren’t desperate to sell, which means about half the homes are overvalued.’ Rick Hoffman, a Corcoran senior vice-president, recently marketed a four bedroom house next door to Martha Stewart and up the road from Steven Spielberg in East Hampton village for $7.5 million. The property sold for $4.5 million, but, he says, two years ago, ‘it would have gone in two seconds at the full asking price’.
Buyers are smarter, have their own research in-hand and are asking the right questions to get deals done-and done quickly, argues Harald Grant from Sotheby’s International Realty in Southampton. ‘The mid-range market, between $5 million and $10 million, has shown a real return to strength, especially for those properties with the best features.’ Sellers’ behaviour has also changed, lowering listing prices ‘so that they can achieve successful sales of their homes’.
However, Dottie Herman of Prudential Douglas Elliman, which enjoys an exclusive referrals arrangement with Knight Frank, believes pricing isn’t the only consideration. That old ‘location, location, location’ adage means a great deal in the Hamptons, where you should try to be as close to the ocean as possible ‘although it costs about three times more. You can always build a new home, but there’s only so much waterfront’.
* This article features in the spring edition of COUNTRY LIFE INTERNATIONAL, out on March 2 with COUNTRY LIFE magazine