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.” 

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