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While U.S. home sales plunged in March – with more pain expected to follow – one area of New York state that is not expecting a long-term, coronavirus-inflicted downtrend is the Hamptons, a popular refuge on Long Island for Manhattan’s wealthy.
According to a new report from Brown Harris Stevens, during the first quarter of the year there was a substantial increase in multimillion-dollar sales in the Hamptons. That, of course, was before the impact of the outbreak set in.
“Prior to the state-wide shutdown of real estate activity in March, the market was showing significant signs of strength, exhibited particularly in the sharp rise in the ultra-high-end market above $10 million,” Robert Nelson, Brown Harris Stevens executive managing director of the Hamptons, said in a statement.
While the number of overall sales dipped more than 9 percent compared with the same period last year, overall dollar volume jumped by more than 17 percent.
Prices had come down – making properties more affordable. In the first quarter, the median sales price was slightly lower when compared with the first three months of 2019.
Nelson told FOX Business the number of ultra-high-end sales was “unusual” for the time of year, driven by what he deemed an increasing number of very wealthy people that have been deciding to invest. And that trend is likely to bode well for a rebound in the region.
While the U.S. real estate market reels from the effects of nationwide lockdown orders, Nelson predicts there will be a lot of “pent-up demand” within the Long Island sanctuary once realtors are able to start showing properties again.
“[These are] New Yorkers, this is where they all come and they want to be here,” Nelson said. “We will really see a takeoff of the market.”
Another factor that is likely to contribute to a bump in activity is the fact that the coronavirus outbreak – which has been particularly severe in New York – caused many Manhattan residents to flee to the Hamptons in order to escape the densely populated city. They either moved into their own homes or rented a property, causing an unprecedented surge in offseason rental activity.
And it’s not just the “normal summer crowd” but a lot of newcomers, too.
“Everyone has come out here, it’s like summer,” Nelson said. “Every house is occupied now … the rental season was crazy.”
Those people could decide to get a “permanent safe haven” as a means to escape the New York City area, particularly with the possibility of a second coronavirus outbreak occurring in the fall or next winter.
On the downside, the exodus of residents from Manhattan caused local cases of coronavirus to rise in Suffolk County.
As previously reported by FOX Business, experts have largely predicted that the housing market will bounce back once economies resume operating as normal.
“As consumer confidence rises and employment opportunities follow, we should see a normalization of the residential market,” Garrett Derderian, managing director of market analysis at CORE, told FOX Business. “While housing led the recession in 2008-2009, it may be poised to bring us out of it now.”