Hamptons rentals suffer as tenants head to global hotspots
The Hamptons are hot – until they’re not.
Anthony Berklich was looking to rent a simple three-bedroom house without a pool near Sag Harbor for the month of July for $25,000. The 37-year-old West Village resident, who runs luxury travel platform Inspired Citizen, has found the perfect summer rental and struck a deal with the landlord. But the next day, someone else had already come, offered $5,000 above his agreed price, and the owner accepted it without even checking to see if Berklich would match the offer.
“Before the deal was done, someone did the same thing to the next guy, paying $10,000 more than he asked, so the house went for $40,000,” he said. he sighs. “Honestly, it wasn’t worth it, so I dropped out of the Hamptons this year.”
Instead, Berklich ventured further – to Croatia, where he scored a three-bedroom retreat for just $5,500 for the month.
“I thought outside the box and found something with Adriatic views and a pool for a fraction of what I intended to pay,” he said .
It’s a common story in the East End this summer, as many Hamptons owners resist wildly inflated prices.
Over the past two years, during the pandemic, summer rents in the Hamptons have jumped 73.6%. And rather than vent, brokers and house hunters are complaining that landlords have doubled down on outrageous demands.
Earlier this year, Robert LaFond, a builder and designer who lives in the Boston area, planned to spend part of the summer with his girlfriend, who lives in New York. After visiting eight residences in the East that he deemed to be shabby or poorly located, they found a lovely house in Southampton that was a bit dated, but with lush grounds and a nice swimming pool. He was asking for $60,000 and they accepted the price.
The next day, when they gave their broker the details of a lease, she called and explained that the owners had thought it over and decided that their house was actually worth $80,000 for that period. The listing was quickly adjusted to reflect the new price.
“I was so alienated that I decided to find something in New England instead,” LaFond said.
But out of curiosity, he followed the list and saw the owners gradually reduce it, down to $75,000, $65,000, and eventually back down to $60,000.
Unsurprisingly, Compass agent Diane Shifman said the rental market in the Hamptons has been slow this season.
“I usually do about 50 rental leases every summer and this year I only did 20,” she told the Post, noting that an uncertain stock market and soaring gas prices have also contributed to the lack of leases. “It seems tenants were frustrated with the high rents, and the landlords who have done so well over the past two years weren’t quite ready to get back to those levels. A balance needs to be struck in order to get the market back on track and we’ve started to see a bit of a concession.
Recent reports show prices are starting to fall, with rents down about 30% since Memorial Day, according to Douglas Elliman – the time when rental prices traditionally drop as the summer season kicks off with the best properties in demand. .
“The rental market is coming out of the price spike we saw last year, but when you look at pre-pandemic as a base, rents are still up 36%, which shows you how much the last two years have been disconnected. from sustainable levels,” said Jonathan Miller, CEO of Miller Samuel Inc., author of Douglas Elliman Market Reports. “The trading volume is only half of what it was last season.”
Raymond Smith, director of Douglas Elliman’s Southampton office, agrees landlords need to come to grips with the new reality.
“People got the greed of COVID and raised prices too much and tenants said we’re not willing to pay,” he said. “There was a property in the village of Southampton that the owners listed at $350,000 for the season, but before COVID it was maybe worth $150,000. A lot of landlords did very well back then, but reality hits and every house that’s priced right is up for rent.”
Now that the European Union and the United States have dropped testing requirements for travel, the Hamptons face real competition with overseas destinations. According to brokers, European and Caribbean destinations are the most popular alternatives to the Hamptons this summer.
“My agents tell me that savvy clients are asking to rent Russian-owned houses in Lake Como and Forte dei Marmi because they know the owners are not using them and cannot sell them at the moment due to repression by the European Union,” said Lee Sommers of Compass.
A hot spot is Passalacqua, a converted historic house that opened in Lake Como this month, with a 60ft pool, water views and 24 suites that start at less than $1,000 a night. .
Luxurious islands like Bermuda are also popular. At the Rosewood Bermuda, a two-bedroom suite is $88,000 for July or August.
At the St. Regis Bermuda, which has a pool, spa, and golf access, a two-bedroom room can be purchased for as little as $1,000 per night and a three-bedroom room can be purchased. purchased for $1,600. Good luck finding something luxury in the Hamptons at that price.
Sommers said she was recently asked to list a property owned by international clients in the Hamptons and declined.
“It was a million dollar summer rental and I declined,” she said. “I still agreed to register his house in Provence!”