November 3, 2021
Good Afternoon from the Bridgehampton Office.
As we head into the last few weeks of the year, all data continues to show an incredibly strong Hamptons luxury real estate market as sales volume is steady, prices continue to increase, and inventory contracts further. However, if we dig in a little deeper below the surface, I think there is an undercurrent developing that we need to watch closely. We can look at all the data and explain it any way we want, but we also have to analyze client behaviors and the non-quantifiable metrics to get a real grasp on where things are.
My instincts tell me that there has been a shift in the market over the last couple of weeks, and that maybe all the activity has created market fatigue. Whether through broker-babble, the press, anecdotal bar talk, or over-hyping through social media, this last rush in the market drove Buyers into a bit of an uncontrolled frenzy, and that is simply not sustainable for a healthy market.
We are now seeing a new Buyer behavior setting in, with all of the classic signs of "buyers remorse” in effect. Whether walking away from deals, exiting bidding wars - or as I've seen twice in the last week - Buyers walking away from Deposits and canceling existing Contracts.
Maybe it's just the end of the year and focus is shifting to the Holiday Season, but my gut tells me that after 20 months of non-stop market action, we may be looking at a cooling. Only time will tell.
In other news for those with waterfront or near-water properties, the FEMA National Flood Insurance Program has recently implemented a new flood insurance rating system. This will enable FEMA to charge rates that are equitable, easier to understand and better reflect a specific property’s flood risk. I defer on all insurance matters to one of the East Ends preeminent experts in home insurance Chris McDonald at Amaden-Gay Agency in East Hampton. Nobody better understands the complexities of these kinds of policies, and I cant encourage you enough to reach out to him at [email protected] or 631-324-0041.
And as always, please feel free to reach out to me directly for further conversations about the current market or if I can answer any questions.
Licensed Associate Real Estate Broker