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Manhattan Market Syncs Up With the Hamptons

[This week, real estate appraiser, Curbed graph guru and podcaster extraordinaire Jonathan Miller breaks down the Manhattan-Hamptons market connection.]

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Yesterday we released two reports for the East End market—a ten year sales report and a fourth-quarter version. Over the last decade the largest gains in price occurred in the top 20% of the market, nearly double the rate of the lowest 20% of the market. New product was continually added to the housing stock and tended to be larger properties. In the past year sales activity in the lower half of the sales market has seen more activity than at the high end.

Since the Hamptons saw a price correction earlier in this housing cycle than Manhattan's eventual reckoning, I wanted to see how the two markets otherwise compared to each other. Conventional wisdom said that Wall Street has been driving a lot of the high-end demand out east, and many of those buyers often own a property in New York City, so I expected the two markets to show similar trends.

As a second-home market, I have been somewhat surprised that the East End hasn’t fared worse since the Lehman tipping point in September 2008.

To draw the comparison I took the year-over-year change in median sales price adjusted for inflation over the past five years. I’ve got 25 years of Manhattan history and 12 years of Hamptons history compiled, but for the latter, I haven’t compiled the quarterly medians yet, only annual. I’d love a longer window but I wanted to use smaller periods of time to be more granular.

This is pretty simplistic but it seems as though the markets trended together in 2005 and 2006 (blue) and then again in 2009 (blue). The 2007–2008 period (red) shows a disconnect but I am not sure why. My guess is that this was the peak period of new-development closings in Manhattan, which delayed the decline in price trends.

In sync – out of sync – in sync.
· Manhattan, Hamptons/North Fork Y-O-Y Change in Median Sales Price [Miller Samuel]
· Three Cents Worth archive [Curbed]