Luxury-home prices in New York’s Hamptons soared to record highs in the first quarter.

Sales in the top 10% of the market were completed at a median of $8.54 million, up 11% from a year earlier, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The average price of high-end homes in the Long Island beach towns also set a record at $16.1 million, a 33% increase that was driven by a few especially large purchases. 

Demand for luxury homes is “very strong,” said Todd Bourgard, Elliman’s chief executive officer for Long Island. “We have more buyers in that market right now than we do inventory. So when something comes on that is priced reasonably for the luxury market, we’re getting great interest.”

Still, luxury transactions in the quarter fell to 18 from 40 a year earlier. Across all price ranges, Hamptons deals slid 57% to 171. It was the second-lowest total since the firms started tracking the area’s sales in 2005, undercut only by the 145 closings in the first quarter of 2009.

“Mortgage rates, economic uncertainty, are we going into a recession?” said Jonathan Miller, president of Miller Samuel. “All these variables that are floating around are part of the mix of why overall sales activity is lower.”

A shortage of listings has also curtailed purchases in the Hamptons—a strip of Long Island’s South Fork that includes Amagansett, Montauk and Southampton. Inventory has shown signs of improvement recently, but not as quickly as real estate agents and house hunters would like.

There were 894 homes on the market at the end of the quarter, a 33% jump from a year earlier, but still 54% lower than in the first quarter of 2020, before the pandemic. While there are still plenty of buyers out looking, they’re frustrated by what’s available.

“If we had our normal spring, where we usually get a good number of homes that come on the market, we would see those numbers of sales rise immediately,” Bourgard said.

For all sales in the quarter, the median price fell 2.9% from a year earlier to $1.36 million. Big luxury purchases, however, pulled the average price to a record high of $3.08 million, 18% more than in early 2022.

Those major deals included the $77.8 million off-market purchase of 32 Windmill Lane. It was part of an oceanfront East Hampton compound that sold in two separate transactions closing in January for a total of $91.5 million.

Also pulling up the average was 51 West End Road in East Hampton, which Elliman agents Kyle Rosko and Marcy Braun sold in January for $35 million. The 1.5-acre (0.61-hectare) oceanfront property is near Georgica Pond and has a five-bedroom house built in 1926. The sale came after two reductions from the $60 million asking price set in late 2021.

This article was provided by Bloomberg News.