George Giacoia spoke to three different agents before landing on the $1.695 million asking price for his Southampton home in May. The 70-year-old retiree had reservations about the price point, but decided to test the market.
“I had no response at all,” he said. “There was not a phone call, nor was there a person that came to any of the open houses.”
Since then, Giacoia has lowered the asking price by nearly $400,000.
Price cuts in the Hamptons would have been unimaginable just a few months ago. Home values in the luxury Long Island enclave rose to record highs during the pandemic as wealthy New Yorkers sought an escape from the city, with median prices surging 88% between the second quarter of 2019 and the same period of this year.
But the Hamptons market is entering a new phase as a bumpy stock market, early signs of a housing slowdown and fears of a recession cause demand to subside. It doesn’t help that mortgage rates have moved higher at a time when inflation is making everything more expensive.
“Buyers have more negotiating power now than they did six months ago,” said Drew Green, a broker in the Hamptons for Saunders & Associates. “The fervor that we were experiencing has subsided. The competitiveness for buying homes has waned.”
To be sure, prices are still well above pre-pandemic levels. More than 70 homes sold for over $10 million in the first half of 2022, compared to 16 in 2019.
However, many of the homes that were listed for sale in the spring are facing a rapidly changing market, and sellers are making adjustments to reflect the new reality. The number of listings with reduced asking prices has been steadily rising since April, according to data from Out East, an online marketplace for Hamptons real estate. Homes with price drops made up 11% of the overall Hamptons market in July, almost double the level in April.
Shifting Market
107 Stoney Hill Road in Sag Harbor—which has five bedrooms, five full and two half bathrooms, a pool and a tennis court—was listed in April for $5.295 million and has since cut its price tag by $500,000. It’s still for sale.
37 Huntington Lane, a home with seven bedrooms and six and a half bathrooms in Water Mill, hit the market in June at $5.995 million. After about 30 showings in the first four weeks, the sellers only received one offer, which was below asking. After slashing $745,000 off the price in July, they received an offer and the house is now in contract.
Giacoia, meanwhile, held three open houses within the first few weeks of listing his three bedroom, two-and-a-half bathroom home at 26 Woodbine Place, but nobody showed up. He lowered the price by $100,000 twice in June, and then made two further cuts in July.
“Am I going to be lowering my price any more? No,” said Giacoia, who plans to move to Italy in October. He finally received an offer two weeks ago and, after some negotiation, the buyers agreed on the new asking price of $1.299 million. They’re currently finalizing the details of the offer.
Jack Pearson, a Compass broker who represented 37 Huntington Lane, said discounts may be speeding up some deals, but that doesn’t mean all sellers are willing to lower their prices.
“With the economy and with uncertainty in the world there are definitely people who think that prices will go down and they’ll wait,” Pearson said. “But it doesn’t mean that what they are waiting for, if it’s a prime property, it will be reduced by that much.”
Leslie Reese, 65, put her three bedroom, two bathroom home in Bridgehampton on the market in July for $1.895 million and declined to accept an offer for $500,000 below the asking price.
“I thought it was a fluke,” Reese said. “I guess they feel you’re in a desperate situation and feel like they can get a bottom price, but I have a budget.”
After two weeks of sitting on the market, she decided to lower the price by $245,000, hoping that would speed up the sale. She received an offer below the new asking price and, after some negotiations, the home at 17 Worchester Court is now in contract for $1.5 million cash.
Green, who represents the sellers behind 107 Stoney Hill Road, said the property has seen increased interest from potential buyers after it decided to cut the asking price to $4.795 million. Asked whether the sellers would consider a lower asking price if offered, Green said yes.
60 Harbor Dr., Sag Harbor
April 1 price: $2,995,000
July 28 price: $2,600,000
Reduction: $395,000
107 Stoney Hill Rd., Sag Harbor
April 8 price: $5,295,000
July 31 price: $4,795,000
Reduction: $500,000
16 McGregor Dr., Southampton
June 24 price: $1,995,000
Aug. 1 price: $1,795,000
Reduction: $200,000
17 Worchester Ct., Bridgehampton
July 22 price: $1,895,000
Aug. 6 price: $1,650,000
Reduction: $245,000
46 Cedar St., East Hampton
May 19 price: $4,500,000
Aug. 5 price: $3,950,000
Reduction: $550,000
26 Woodbine Pl., Southampton
May 29 price: $1,695,000
July 31 price: $1,299,000
Reduction: $396,000
320 Noyack Rd., Southampton
May 9 price: $2,695,000
July 27 price: $2,199,900
Reduction: $495,100
6 Joshuas Path, East Hampton
April 8 price: $3,350,000
Aug. 9 price: $2,995,000
Reduction: $355,000
68 Old Trail Rd., Water Mill
July 9 price: $2,495,000
Aug. 4 price: $2,290,000
Reduction: $205,000
16 DeLavan St., East Hampton
May 13 price: $1,795,000
Aug. 8 price: $1,695,000
Reduction: $100,000
This article was provided by Bloomberg News.