RUMORS AND LIES: FAIR AND BALANCED IN THE HAMPTONS.
Illusion is the first of all pleasures.
This turned out to be the summer that never happened in the Hamptons. Between the rain, cool temperatures and lowered expectations, many local businesses that do not serve alcohol suffered. Even restaurants suffered. Beaches were often empty. At times, it was actually quite pleasant not to be buzzed by Porches and Bentley’s trying to find a parking spot at Roger’s Pavilion in Westhampton Beach.
The Real Estate industry continued to contract and several brokers closed-up shop. Estimates of total price drops hover between 35% and 50% from their 2006/2007 highs and the main selling areas are now in the under $500,000 range. While there are sales in the million-dollar territory, price reductions and hard bargaining are now the norm since mortgage money in that category is difficult to obtain. While there are actually some new no-income verification loans available, generally a 30% deposit is required.
There are many differing opinions on when the market will return to some semblance or normality, but right now properties languish on the market for up to two years if they are not priced aggressively – translated: take a beating or sit with an unsold home.
East Hampton has done better in terms of rentals and sales and Southampton has had the biggest drop in activity. This summer, renters started out by offering owners 50% off the listed price. Buyers have brutalized brokers as well as sellers – often walking away after they got their price. Despite this, one $25 million dollar mansion rented for half a million dollars for the month of August only.
Nevertheless, the shake-out will net fewer real estate brokers, fewer rental units and fewer businesses to service them by next summer. Let’s just say that it was not a summer to be in the lawn sprinkler business.
The climate is dreary in East Hampton as law enforcement (D.A. Spota) has arrested a few politicians over charges of dipping into the Community Preservation Fund – and in Southampton everyone is still waiting for the other shoe to drop over the missing millions from Town coffers. So far, we only know about the State sending in a few investigators to figure out where the $4, 8 or 16 million has gone. Spota is also up for re-election he but has been cross-endorsed by both parties and is certain to be re-elected. The politicians better lawyer-up. McGinty picked Giuliani, so that contest should be interesting. 2010 may be the year for political show trials in the Hamptons.
Thomas J. Spota
While they work on that, the campaign for Southampton Supervisor is heating up. Linda Kabot, the current Supervisor (who was going to be challenged in another primary by Mr. Malone of her own party), will now only face Anna Throne-Holst from the Democratic side of the aisle in November. In an about-face, the Republicans – through the Conservative Party line -- seem to be deserting Kabot in favor of Throne-Holst – by placing their bets on the next election. The machinations of a Republican Party, controlled by Skip Heaney (former Supervisor who lost to Kabot in the last Primary) – continue to play out.
Linda Kabot Patrick "Skip" Heaney Anna Throne Holst
We may be in for a Democratic administration for the first time since DePirro if this battle royal plays out, as it appears to be happening. Throne-Holst is popular and has benefitted from the Obama sweep, but Kabot is also well liked by the voters, if not by her party.
Meanwhile, the Town budgets are disaster. No real estate sales translate into no funds. With no sales and reduced property tax income – as the tax base shrinks, property tax increases become all but certain. In an economy that looks like it will take several years to recover.