Boom for Hamptons summer rentals is cooling down

Vacationers looking for a good rental deal in the Hamptons are in luck this summer as soaring pandemic prices cool down - with some plush properties slashing their prices by half.

After the onset of the pandemic rental costs went through the roof, as many home owners chose not to vacate their houses for the summer, and others saw renting a place in Long Island as a safe escape from the city.

Now, wealthy New Yorkers are looking to celebrate their post-pandemic freedom and some are opting for vacations farther afield, according to a Hamptons real estate agent.

'People have been in the Hamptons for three or four years and now they're traveling again this year,' Susan Breitenbach, a broker at Corcoran Group, told the New York Post's On The Money.

The change in rental demand has been reflected in sale prices too. In the first quarter of 2023, the median home sales price in the wealthy areas of eastern Long Island dropped by around 7.6 percent since the year prior, to $1,662,500.

Rentals in the Hamptons are expected to take a hit this summer after soaring for years. Pictured is a house in the Hamptons

Now that the pandemic is over many wealthy New Yorkers are opting to take vacations farther afield. Pictured is a house in the Hamptons

'Over the last few years, the market has been insane, people would offer $100,000 over asking price for a summer rental,' she said.

'Now, half my days are people calling me asking they should reduce the price of their home to rent,' she added. 'This year everyone I know including myself is going to Europe.'

Making matters more favorable for renters this summer is that there's less competition - Wall Street bonuses fell 26 percent from last year, to nearly $180,000, according to estimates released by the New York State Comptroller. 

On top of that, now the pandemic is over and people are slowly returning to their offices, the allure of the Hamptons as a remote working haven is fading. 

'The pandemic was once in a lifetime pricing we'd never seen before,' David Mazujian, a licensed real estate salesperson at the Corcoran Group, told the Post.

Now the pandemic is over many wealthy New Yorkers are opting to take vacations farther afield, according Susan Breitenbach (pictured), a broker at Corcoran Group

'But rentals are alive and active, landlords are realistic, and deals are getting done.'

The reduced demand for renting properties was also reflected in the cost of buying homes in the Hamptons. Last month Bloomberg reported that house prices had fallen for the first time since 2019.

The median home sale price fell 7.6 percent in the first quarter while the total number of homes sold dropped 44 percent from the year before to 424, according to data from Town & Country Real Estate.

Although fewer homes sold at all price points, the higher end of the market was hit the most hard. The number of sales of homes priced between $10 million and $20 million fell by around 60 percent.

'The retreat began with interest rate hikes at an unprecedented pace, due to the highest inflation in four decades, not to mention a stock market that gave even a seasoned investor whiplash,' CEO of Town and Country, Judi Desiderio, told Bloomberg.

Although fewer homes were sold at all prices, the higher end of the market was hit the most hard. Pictured is an aerial view of Southampton, New York

Last summer, as the pandemic was beginning to wane, the beginning of the trend was observed. 

Last May, CNBC reported that the beginning of the post pandemic era had begun. Since then the war in Ukraine affected energy prices, inflation has been high, and overall economic uncertainty may have dissuaded people from luxury purchases.

The outlet reported that lots of people who had historically rented a house for the summer ended up buying them during COVID, effectively removing themselves from the market. 

The latest quarterly report by Miller Samuel for Douglas Elliman found that in the Hamptons, year-on-year, prices were down 2.9 percent, sales were down 60 percent, inventory was up 33 percent, and that properties would spend 23 days long on the market before being sold.