Local Hamptons official Jay Schneiderman is starting to see the benefits from New York’s super-rich settling in his town of Southampton since the pandemic.
“I’ve had a call from a billionaire real estate developer who was previously living in New York who wants to help fund a cultural centre and theatrical complex in the village,” says Schneiderman, the supervisor of Southampton. “He is looking to raise over $100m: with a few phone calls he probably could.”
Over the past year a surge of movers from the city has driven up transactions and prices in the well-heeled Long Island enclave. In the three months to September 2020, 826 homes were sold in the Hamptons, nearly double the 422 sold a year before, according to Serhant, a real estate company. A year after the outbreak began, demand remains strong: the 481 homes sold in the three months to March was 80 per cent up on the same period a year earlier.
Robert Zecher was among the first arrivals. The 38-year-old property developer moved with his family from the West Village to their six-bedroom summer home in East Hampton Village on March 13. Many of his friends did the same. “One hundred per cent of my friends who had [Hamptons] houses moved to them. Those that didn’t rented one,” he says. “By April 1 2020, there wasn’t a friend of mine left in Manhattan.”
Zecher is betting big on the Hamptons boom continuing. In 2019, his company spent $3.5m buying two homes in the area, rebuilding them to sell on at a profit. So far this year he has already spent $15m on four and his company is borrowing more than ever before. He expects demand to continue at least until next summer, by which time he plans to have sold the homes.
As Covid-19 infections in New York City continued through the autumn and winter, and restrictions continued, agents and local politicians say that the Hamptons’ off-season population — always lower than in the summer months — has grown significantly. Southampton’s permanent population in 2019 was 58,398 according to the US Census Bureau; the pandemic has seen this grow to roughly 80,000, Schneiderman estimates.
Despite the promise of super-rich fundraisers for local cultural projects, more residents mean more pressure on local infrastructure. “The waste management [service] has seen more waste coming in,” says Schneiderman, adding that he has seen crime associated with increased wealth — such as break-ins and thefts of expensive cars — grow.
Enrolments at public schools have increased, particularly in the more seasonal communities such as Sag Harbor, Amagansett and Bridgehampton, according to assemblyman Fred Thiele, who represents an area covering much of the Hamptons at the New York state legislature. “Sag Harbor had to hire 10 new teachers during the fall.”
The booming housing market has increased revenue from the revenue from a 2 per cent transfer tax — raised on property sales in the five towns comprising Long Island’s East End — from $78m in 2019 to $139m last year, according to Thiele.
With increased demand, house prices have risen, inventory has fallen and home searches are taking longer. The median price of a Hamptons home sold in 2020 was $1.695m, 17 per cent higher than in 2019, according to Serhant.
Charles, who moved from France to New York City in 2018 and who did not want to give his real name, is looking to buy a home in Amagansett for between $5m and $10m.
“There is a limited supply and the nice properties are fairly highly priced. I get the impression that homes are trading at the [guide price],” he says, noting the rarity of discounts. He and his family still spend weekdays in their Manhattan home because his investment management firm requires him in the office there. But since September, they have spent holidays and nearly every weekend in their Amagansett rental home, for which they have paid roughly $250,000 until June.
It was this off-season use that cemented his decision to buy, Charles says. His rental is near the South Fork Country Club, surrounded by farms, close to Napeague Bay and away from the popular streets further south between the Route 27 highway and the beach. “I wanted the calm and the views of the fields, not of the craziness of the social scene and the ultra-expensive micro market.”
He believes the appeal of New York will reassert itself. “For the past few weeks I’ve seen the flow back into New York [ . . .], people are out on the streets. Many aren’t wearing masks, which I assume is because they are vaccinated.”
But he also thinks the trend for year-round Hamptons living will endure. “I remember [New Yorkers] saying people come from Memorial Day [in late May] to Labor Day [early September] and shut their houses for the other nine months.” Even during the winter months people stayed in the Hamptons this year, though. “We’re seeing people who would usually go to Florida in the winter,” says Charles.
The Hamptons’ year-round appeal is a mixed blessing for locals. Many businesses that suffered from Covid restrictions — including restaurants, massage therapists and beauty services — have benefited from better than usual off-seasons now that many restrictions have been lifted.
After a disastrous spring, and a severely curtailed summer, the winter business has been vital, says restaurateur Pierre Weber, 66, owner of Pierre’s on Bridgehampton’s Main Street.
“Usually in the Hamptons [winter] is very brutal. We make money in the summer and live on it in the winter. This [winter] was much better than a normal off-season, because people stayed in the area. All these New Yorkers who I’d only see on the weekends — I’d see them on a Wednesday,” he says. “We’ve been very lucky.”
But recent house price increases have exacerbated the longstanding problem of affordability, which has driven local workers west, to cheaper areas such as Patchogue, Shirley and Yaphank.
“It becomes increasingly difficult to replace the workforce when housing prices are so high compared to local wages in a seasonal economy,” says Schneiderman.
David Loewenberg has worked in the local restaurant business for 30 years and today runs two establishments in Sag Harbor and one in East Hampton. He says that high house prices have hampered his ability to find workers willing to live in the Hamptons all year.
Local WiFi was already stretched to breaking point before the pandemic, says Thiele. “Now with people here year-round and working from home it has deteriorated for many people.” An upgrade to the infrastructure is needed, he adds.
But Schneiderman, who predicts a long-term shift to homeworking will keep many of the new residents in place, is optimistic about what they will bring.
“The beaches are spectacular — the parks, the trails, that small-town way of life, really tough to beat.” He says his local Democratic party has had a surge of new members, and that many have volunteered to be part of campaigns and policymaking. “They are successful people from the city who are out here full-time. They want to contribute and they have a lot of knowledge to share.”
The average price of a Hamptons home sold between January and March was $1.75m; and of the 2,014 homes sold in the area last year, 168 sold for more than $5m, according to Serhant
The median price of a Hamptons home increased 17 per cent in 2020, according to Serhant
The drive from Southampton to New York’s Central Park takes roughly 2 hours (JFK International is 1hr 30m).