What Is The Reason for the 2016 Hamptons Real Estate Slump?

When I wrote a weekly Real Estate Column for Dan’s Papers (Estate of Mind) for 4 years I could only write about how great real estate things were in the Hamptons. LOL, even after the real estate bubble burst in 2008 I was ordered to write how wonderful things were. Now without the constraint of advertisers dictating what I can say, I can publicly ask: WHAT IS THE REASON FOR THE 2016 HAMPTONS REAL ESTATE SLUMP?

In yesteryear I would site sales figures, home closings, CPF quarterly numbers and dive for the most positive stat and zero in on it. Today all you have to do is talk to the agents to know they are not making enough money and some even fear for their jobs.

This time around it is not so much a national problem but a local problem because up-island sales are actually good. In NYC sales are excellent. So, why the slump in the Hamptons?

Some think the new East Hampton Registry rental laws, the crackdown on restaurants, the arrests at the beaches of citizens hoping to protect the natural dunes, the many road blocks for DUI’s, the town officials counting heads for occupancy at the nightclubs, and even the closing of beloved iconic Cyril’s did not help. Yet many local voters applaud many of these moves, with the proof being how popular East Hampton Supervisor Larry Cantwell is going into re-election.

I go around to the restaurants of Sag Harbor, East Hampton Village, Amagansett, Montauk, Bridgehampton and Southampton and I must confess even on a Saturday night without a reservation we get seated, which is good but strange, Except for a few extremely popular tourist places like Nick and Toni’s, The Surf Lodge, and Almond week days are not overly busy during the week. There has to be a message here. Where are the folks how desire or can afford $250plus dinners?

Some feel the absence of folks paying $80,000 plus for Memorial day to Labor Day homes. Many brokers say this season they aren’t out east like other years. Now the south of the highway billionaire crowd with their private chef’s, helicopter snacks, and chauffeured black Cadillac Escalades seem to be obvious to these issues, but the baby boomers/401k millionaires seem to be downsizing their real estate positions and preserving cash as they age. Who is coming in behind them? One has to ask when you buy a Hamptons home now are you investing or buying a luxury?

Has the Obama economy hurt the Hamptons? Or is this just the end result of an aging population of east end lovers whose kids cannot afford to carry on the tradition of buying or even maintaining a Hamptons second home? Have Hampton home prices hit critical mass? Are buyers more selective and are there less of them after a decade of corporate downsizing? Only time will tell. Now for some good news.

An older (91) gentleman told me, “It’s a cycle, I have seen it worst in the 1960’s and early 1980’s…Money will always come to the Hamptons!” Yet a former life insurance agent who now lives retired in upscale Madison, CT said, “The Hamptons slump is nothing, Nantucket is much worst.” Is there a pattern about a certain type of vacationer or buyer?

One thing is for sure there is a 2016 Hamptons real estate slump (other than Montauk), if you are a buyer there is opportunity if you are a seller you have to gamble with time and price.