January 30, 2013

Real Estate: Blistering Fourth Quarter Sales Buoy Market

Two weeks ago we reported that some significant home sales on the East End occurred in the waning days of the year as homeowners sought to avoid an increase in capital gains taxes. Actually, the tax didn't increase, but reverted back to its previous level on January 1 after having been cut by George W. Bush.

The full extent of the selloff wasn't known until now, when most of the deed transfers have been recorded at the county center. The sell-off centered around higher priced properties, and the numbers are irrefutable. The average sale price of homes in the Hamptons in the last quarter of 2012 was over $2.1 million, a staggering 49.4 percent increase, according to the Elliman Report.

The numbers from the luxury market were even stronger. The average sale price of homes in the top 10 percentile rose to a staggering $9.8 million, an 85.4 percent increase. The same market segment in the third quarter saw a 31 percent increase.

Contrast the heady numbers in the Hamptons market with Long Island as a whole: the average sale price for the fourth quarter was $440,000, a decrease in 3.1 percent.

The bigger news, though, was the inventory glut that has stagnated the market for five years is ebbing. According to Elliman there were 14574 listings on Long Island at year's end, "the lowest year-end supply . . in more than eight years." As a result "price indicators edged higher as listing discount slipped."

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