The Hamptons real estate market appears to have lost some of its thrills this year – experiencing its lowest market conditions since the financial crises. A report from Douglas Elliman suggests that sales are falling at the high end and inventory increasing.
The situation is said to have surfaced following year-end instability in the financial markets, and also changes in the tax law for 2018.
Todd Bourgard, Douglas Elliman’s senior executive regional manager of sales for the Hamptons says; “any time there is a new tax law, you’ll find buyers sitting on the sidelines waiting to see how it shakes out.”
The markets face a downward pressure by the tax reform’s $10,000 cap for state and local tax deductions. Agents were sitting in the offices during the first half of the year, Bourgard said. Although the market is still showing signs of elasticity, it has become harder recently to convene a meeting with his agent as many are out to show properties, he says.
The supply of homes remains high on the market. The number of months it would take to unload the entire inventory at the current rate of sales slowed to 15 months from 8 months a year ago.
However, most of the record is sitting at the top of the market. Whereas the share of properties that sold below $1 million in the previous quarter stays up slightly compared with last year, the share of sales over $5 million is reduced – above 18% since last year.