I hope this finds you and your family safe and well. I don’t think any of us will soon forget the challenges of living, working and navigating the last year and a half of our lives through this pandemic. Having been in the thick of East End real estate since the start of Covid, I wanted to touch base and share some insight on supply, demand and the Hamptons market in general.
There is no crystal ball to predict what’s next in any market. Our team’s perspective appears to align with many of the brokers I speak to, that our unique demographics here in the Hamptons can and likely will support an extended and thriving sales market going forward. Here’s a full analysis.
SUPPLY: Slowing rentals may lead to more sales inventory
As we help clients and customers navigate this unprecedented market, we notice two prominent trends. First, our sales inventory continues to remain low. Second, our rental market this summer has noticeably slowed since air travel bans were lifted. Buyer and seller minds tend to translate this data differently. As I speak to other brokers and keep a close eye on activity, we remain confident that the Hamptons market will continue to demand inventory, and that additional supply will follow.
Why? Markets are always cyclical, and ours was just emerging and heating up as the pandemic loomed. Our local community experienced an immediate and massive influx of families looking for homes as they scrambled for safety. Those that could buy did so quickly, with little negotiation.
Rentals exploded as did their rates. Brokers were scrambling to price off-season inventory amid demand that had never existed. Homeowners signed leases for large amounts of quick cash. Many of these homes had been up for sale, but after lockdown started, owners extended leases with no-show clauses and took them off the market.
What does this mean for supply? If our sales market remains strong, and our rental market softens, landlords are likely to put these properties back on the market. This will add much needed inventory for prospective buyers still eager to get into the game.
DEMAND: Buyers are still eager and waiting
We are incredibly fortunate to live and work in such a beautiful and sought-after destination. Unlike many parts of the United States, our customers have benefited financially through the pandemic. The majority have been able to continue working remotely with little financial impact, in fact quite the opposite. A record-high stock market has added wealth to many of our customers’ portfolios. Ask any broker and they will tell you they have a queue of eager and able buyers looking for a home.
Many predict that demand will remain strong for some time going forward, especially when you consider not only this additional wealth, but also the following factors.
We all live in a new normal. New York City real estate is bouncing back with folks returning to the city. Many I speak with want to return – just not to their highly populated offices.
Company executives now have data that proves staff can be just as productive while working remotely.
Companies are evaluating the savings they can incur from new remote work policies and reduced real estate leases.
Our customers have and will continue to have more flexibility in their schedules, and this opens up opportunity to spend more time out east.
Interest rates remain low, and cash remains cheap!
IN SUMMARY: Hamptons real estate always makes sense
It’s a given that markets are always cyclical and one day, supply will again outpace demand. Current demand is keeping developers very busy bringing new inventory into the market. Hamptons real estate is always a smart investment. Regardless of a property’s value or a buyer’s level of wealth, the ability to count on rental income to cover mortgages and expenses opens the market to a wide range of smart investors.