With demand for summer rentals unexpectantly down in the Hamptons, last-minute price cuts are not unusual.
A Chill Has Fallen in Hamptons Rental Market
After two years of soaring prices and frenzied demand, the summer rental market in the Hamptons has fallen back to earth. Some brokers say that this unexpected drop-off in summer rental demand is a result of stock market volatility; other are saying that formerly pandemic-closed, now reopened travel destinations are luring renters away from the Hamptons.
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Harold Grant with Sotheby’s International Realty said, “There are a lot of questions in the air, about the economy, both locally and nationally. It all affects the market.”
According to Enzo Morabito, an agent with Douglas Elliman, said, “there is a tremendous amount of inventory and people are not renting it. And it’s across all segments, from the very low to the very top of the market.”
Remarkable Reversal in One of Highest Priced Rental Markets
During 2020-2021, renters were doing whatever they could to nab a summer rental in the Hamptons. They were also paying record-high prices for those summer-season rentals.
It’s a different story and a different rental market in the Hamptons today. Median rental prices during Q1 2022 dropped -26%, according to Jonathan Miller, CEO of Miller Samuel Appraisers. On top of that, brokers say that some owners are slashing their rental prices by 30%+ just to fill their properties.
Miller said, “The assumption that rents would be sustainable at…elevated levels has been proven to be false.”
Strong Pandemic Home Sales May Be Hurting Rentals Now
Many former vacationers who used to rent in the Hamptons wound up buying to have a more permanent getaway during the pandemic. The average sales price in the Hamptons smashed $2.6M during Q1 2022, an increase of +25% y/y, according to Miller Samuel and Douglas Elliman.
Those former renters- now buyers translate into fewer renters today. “The buyers removed themselves from the rental market,” said Morabito. “Now, all of a sudden, the people who bought want to rent and the renters aren’t there.”
Signs of Pickup in Demand
Gary DePersia, an agent with Corcoran, said that he’s seeing more demand after the “…lull from February to April…(and)…the inventory we had is (now) going.”
De Persia recently rented his highest priced rental ($300,000/week or $1.25M for month of August) for a week in June and said, “…we got what we needed to get.”
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Thanks to CNBC.
