The wealthy bankers and hedgies of Manhattan celebrated a few weeks back when Douglas Elliman released their 2Q 2017 Hamptons real estate guide showing that the market for excessively priced weekend home was on the rebound. Both pricing and volume of home sales were up 'bigly' year-over-year at 12.7% and 22.8%, respectively.
All of which is great news because we had been hearing all sorts of horror stories about people potentially having to give up one of their lambo's if the market got much worse...
But, as Bloomberg points out today, there is one segment of the Hamptons market that is still completely dead, namely the massive mega-mansions of the late 90's and early 2000's. As Bridgehampton realtor Paul Brennan notes, "great big huge houses are just so last season, darling"...well, we're paraphrasing a little.
“Those great big huge houses from the 1990s and early 2000s, they’re sitting,” said Paul Brennan, a Bridgehampton-based broker at Douglas Elliman Real Estate. “I think that conspicuous consumption isn’t in vogue these days, and that’s why bigger isn’t better.”
He continues, “The taste is: ‘I want it now, and I don’t want it huge,’ and those substantial houses haven’t come down in price enough to either knock them down or renovate them to a certain standard.”
Taste aside, it’s also about recognizing that mega-mansions aren’t always the most fun to live in.
“I think there’s a different awareness,” said Moore, of Sotheby’s. “If you have a really large family, with grandchildren and staff, of course you want to accommodate everyone graciously.” When a house is too large, though, “that almost suggests an alienation factor between families, where everybody is in their own wing.”
But Debbie Brenneman of Corcoran would like to reassure you that if your family of four decides to downsize from a 13,000 to 8,000 square foot home, you'll still be able to survive your grueling, cramped weekends without tripping all over each other.
Smaller, she added, is a relative term as well. “If you go from 13,000 to 8,000 square feet, it’s still a large home.”
Oh, and if you have a tennis court, you might as well bulldoze that right now because the guilty conscience of New York's modern-day, liberal millionaire simply can't have people thinking he's a pretentious, greedy scumbag...you know, because a 'modest' 8,000 sq. ft. weekend home without a tennis court just screams out 'I'm a man of the people.'
“Before, everyone’s theater had to be bigger than the next,” he said. “Now they’re doing flex-rooms, where the screen can come down, but when it’s up, it can be a rec room for the kids.”
Tennis courts, once considered a beacon of the blue-blooded life, have also fallen from favor.
“It’s not an imperative for most people,” Moore said. And even when it is, buyers soon find that it’s more for show than regular use. “Some people still seem to like the fact that they could at least put a tennis court on the property,” Brennan said. “But they don’t use it.”
So what is selling? Shockingly, houses that have dropped 25-50% in price are attracting the most interest...thank God Bloomberg was able to interview some local real estate experts who were able to explain how basic math works. We now understand why these agents are worth every penny of their 6% commission checks.
Location, unsurprisingly given that this is a beach destination, is about proximity to the ocean.
“That’s what people come out here for,” said Moore. “You want to be as close as you can afford.” This week, Moore listed a 5,000-square-foot house on the beach for $55 million.
"Primarily, people are buying houses that have come down in price from their initial ask by probably 25 to 50 percent,” he said. “That’s what’s selling.”
So there you have, sometimes smaller is better...but just don't go below 8,000 square feet because at some point it just stops being trendy and starts getting embarrassing.