Demand For Hamptons Summer Rentals Has Skyrocketed In Pandemic

The demand for summer rentals in the Hamptons had skyrocketed due to the COVID-19 pandemic, and the crisis has also changed the average length of stays and what renters are looking for in a home.

Active rental listings are being snatched up in the blink of an eye, real estate professionals report, and the South Fork may be coming close to maxing out its capacity.

Cristina Matos, an associate broker with Brown Harris Stevens, said Friday that she hasn’t worked this hard before in her 17 years in the business. For 14 hours every day, she’s on the phone and on the computer finding homes for rent.

Prices have gone up, renters are looking for longer stays, and homeowners prefer to keep the same tenants for longer rather than having turnover, Ms. Matos reports.

The people keep coming, and there are only so many houses for them, she said. Rentals are going so fast that it is frustrating for clients, she added. Listings cannot be updated fast enough to indicate what’s still available and what’s been rented, she explained. When she performs a database search, many homes that appear available turn out to be rented already when she calls to inquire. “Every morning I have to verify the house didn’t get an offer the night before,” she said.

Ms. Matos said it’s a race to grab a moving target.

The first avalanche of renters came in March, when the coronavirus was still new to people, and they looked to rent through May, she said. As the situation progressed, people began to look for rentals through June. Now, callers are looking for full-season rentals throughout the summer.

“They realize: ‘This is going to be my summer. I am not going to travel anywhere, and the Hamptons will be the place that provides me a sense of vacation,’” Ms. Matos said.

Very recently, requests began for extended season rentals, and now many homeowners who would not normally list their Hamptons homes for September and the winter are doing so.

Not only is demand up, some second-home owners are planning to use their Hamptons homes themselves, which puts a pinch on supply. “A lot of homeowners came from the city and decided to use their home and not rent this summer,” Ms. Matos said.

She is letting potential renters know what to expect: “My first disclosure to them is this is not like a typical rental market with options and selection. This is about what’s left, and you pick one.”

Some clients have scoped out a few houses, and by the time they decided that they liked the first option the best, that first house was gone, she said. The search starts over, and it can take her a whole day just to find three or four homes that are available.

Ms. Matos is finding that every budget and price point is busy now.

“Everything is renting, regardless of price,” she said. “It’s a process for them to go through the inventory and realize the prices this year are higher,” she said of clients. They are learning that their budget doesn’t get them the kind of house and amenities they expected, so they raise their budgets and she starts searching again, she said.

One family Ms. Matos worked with had four leases fall apart. In one case, someone else offered more money for the house. In another, the landlord changed his mind and decided to use the house himself.

“We’re dealing with this every day,” she said.

Some landlords are price gouging, Ms. Matos has found, and she said some renters are offering more than the asking price to guarantee they will get the house.

It’s not just rentals that callers are interested in. “I’ve had movement on sales without a doubt,” Ms. Matos said. “I had a listing on the market for over a year, and all of a sudden I got two offers.”

She expects to be busy with sales soon. “A lot of people are starting to think how good it is to have a second home and leave the city with family,” she said.

Judi Desiderio, the founder and CEO of Town & Country Real Estate, said that, prior to this year, short-term rentals through vacation home booking websites had become the norm.

“Now, no one wants a stranger in their house for two weeks, and nobody wants to be in a house that had a stranger in it for two weeks,” she said.

Rather, everyone wants a full-season rental.

At the outset of the COVID-19 crisis, there was an urgency for renters to move in immediately so they could ride out the stay-at-home order in a Hamptons house rather than a Manhattan apartment.

“That was a big push in March when no one was ready for that,” Ms. Desiderio said. “The stores weren’t ready for that, the roads weren’t ready for that. Nobody was ready for that.”

It was crazy through the end of April, she said. Things had calmed down, but then people realized the effect of the virus was long-term. “Then what happened is what I call ‘round two.’” Buyers who had been sitting on the fence decided to move forward, because they wanted a place to go.

Now comes round three, she said, as the people who must have been in denial about the length and the impact of the crisis are coming out. Suddenly, it dawned on them: “Holy crap, it’s Memorial Day. Where’s my place?”

Inventory is at an all-time low, and people who normally seek out a one-month summer rental may not be able to do that this year, Ms. Desiderio said.

Landlords are also wary of short-term rentals because of a new state law this year that prohibits collecting more than one-month’s rent in advance and because of the state moratorium on evictions that was put in place due to COVID-1, she explained.

“There’s heightened emotions and hyper-tense attitudes towards everything, and I think it’s because we really are without a playbook here,” she said, noting that no one knows when the situation will pass.

On the demand side, the summer tenant population in the Hamptons in 2020 is the greatest it’s been since the period after 9/11, she said.

“I suspect that we will be fully occupied by June — 100 percent occupancy,” Ms. Desiderio said. “Imagine what the roads will be like.”

Renters’ desires are different, too.

“All of a sudden, everybody has to have a pool — has to,” she said. “And I think that’s maybe because people expect they will be spending a lot of time in their house. And if their wallet allows, they want more. They want a tennis court, they want a big yard to roam in.”

More than ever, people want homes near the water, whether the ocean or a bay.

On prices, Ms. Desiderio said she doesn’t see landlords price gouging — except maybe for the few oceanfront homes with a pool and a tennis court, because there are only a handful of them on the rental market. For the most part, prices are in line with last year, she said.

Gary DePersia, an associate broker with Corcoran who deals in top-tier listings, said supply was not initially the issue. Though some homeowners decided not to rent out their houses this summer so they could use the houses themselves, others who normally don’t rent out their houses, did so, having heard about increased interest and increased pricing.

One example of a property that normally wouldn’t be on the rental market is the Shou Sugi Ban House, a spa and hotel in Water Mill. With the pandemic negatively affecting the hotel business, the owners have instead offered the whole facility as a Memorial Day to Labor Day rental — listed with John Vitello of Brown Harris Stevens — for $1.25 million. That includes 13 guest studios, a fitness pavilion, hydrotherapy plunge pools, a watsu swimming pool, a steam room, a sauna, an infrared sauna, an ice fountain, five treatment rooms and a solarium roof deck.

“Although many are spoken for, rentals remain available at all prices in every location,” Mr. DePersia said.

Among his listings is 277 Surfside Drive in Bridgehampton, an 11,000-square-foot oceanfront mansion built this year and asking $450,000 for two weeks or $1 million for a month. If it does fetch that rate for a month, it could set a record.

Rentals have gone fast and for top prices, Mr. DePersia agreed, but he said that doesn’t mean they are all gone: “No one should be intimidated to look for rentals based on all the press the Hamptons rental market has received.”

“Demand is coming from first-time as well as long-time renters primarily from New York City seeking to shelter in place here,” he said. “Many are with children who are not going to school or camp or back to their college campuses. While families are sheltering in place together, they are also here for longer than they first thought they’d be. And now, many have either extended their short-term leases through the summer or found new houses. Some have even started to consider houses for the off-season starting after Labor Day.”