Hamptons Real Estate Roundtable: Memorial Day 2024 Edition

On the eve of Memorial Day weekend, Hamptons real estate professionals weigh in on the state of the market and changes in the industry.

How will the National Association of Realtors settlement affect the Hamptons real estate industry?

Ashley Farrell: This remains to be seen, and no one can predict the future. That being said, I am confident our industry will thrive, despite any changes. In this business, you need to be nimble, and I will say a great agent provides great value — on both sides of the transaction.

Robert Lohman: The decision has generated a lot of talk about commission. In my experience it was always open to negotiation from all sides with each broker doing their part to bridge the gap when needed. When I see a listing with a lean commission I have concern that bringing about a deal could be more difficult. People work hard and should get paid for doing their job well.

Judi Desiderio: At this time, it is business as usual because we have not been given any other direction from New York State as far as additional disclosures. As always, we conduct business, totally transparent in cooperation.

Terry Cohen: I believe that any implemented protocol will eventually become normalized. While there may be some initial confusion, it is unlikely to have a significant long-term impact.

Todd Bourgard: I don’t see the settlement having much effect on the Hamptons market. There’s nothing in there I think will upset the course the market is on now.

Dana Trotter: One of the key outcomes of the settlement that will filter down into this market is the push for greater transparency in real estate transactions. Commissions in the Hamptons have always been negotiable, and this definitely aligns with the settlement’s goal to eliminate fixed commission rates. The increased public awareness and expectation for negotiation on commissions should lead to a more informed and empowered consumer base, which in turn should foster more trust in the industry and the process. Overall, while the direct impact on the Hamptons real estate industry is uncertain, the settlement is likely to foster more transparency and potentially a more competitive market environment.

Deborah Pirro: There will be procedural changes and we are still awaiting additional details on those. It is important to recognize that approximately 90 percent of buyers do use a buyer’s broker/agent, and I don’t think that will change much. If a seller decides not to pay a buyer’s broker/agent commission that commission may very well be written in as a financial component of the offer.

Jennifer Friedberg: In the Hamptons market we believe its impact may be muted as there are many unknowns at this point. Buyers here traditionally prioritize working with experienced brokers who understand the market, the area’s various regulations (including but not limited to land use and zoning matters), and can navigate complex transactions. An experienced buyer’s agent brings invaluable expertise, an extensive network, resources, and skilled negotiation abilities. They provide comprehensive market analysis and manage the entire transaction process, ensuring a seamless experience from the initial offer to closing. In the Hamptons, where properties come with unique challenges and opportunities, the focus on relationships, service and expertise remains paramount, even amidst potential shifts.

Geoff Gifkins: New York State and the local market have always been transparent regarding representation and renumeration. The recent settlement has highlighted the importance of full disclosure to all sides of the transaction

What is the mood of the Hamptons home sales market as the summer is about to begin?

Ashley Farrell: Generally, the mood of most seems optimistic. Many sellers feel they are still listing a home where they’ve gained exceptional equity, and many buyers seem to have stockpiled cash while waiting for the market to shift. Despite interest rates not having come down as expected, buyers’ increased liquidity has made many feel more secure about a home purchase. Of course, the fact that the days are getting longer, the lawns are getting greener, and we’re rapidly approaching beach temperatures doesn’t hurt the mood either! Summer is when our region shines brightest.

Robert Lohman: In general, the inventory is very low with fewer people looking. If the interest rates drop a bit there could be a burst of sales as I feel there are many buyers watching from the sidelines. This is supported by well-priced homes going into contract very quickly.

Judi Desiderio: Sales in 2024 are better than in 2023, and we anticipate the rest of the year to be a good one.

Terry Cohen: Memorial Day marks the unofficial start of summer in the Hamptons, bringing with it a consistently positive mood. With improving weather and summer plans starting off, those who are seeking new homes will begin their search as they settle in for the season.

Todd Bourgard: The mood going into the summer season is upbeat and positive. We have many new contracts out and a number of buyers out there, for sure. I think there was a large pool of buyers who got exhausted contending with the continuous multiple-offer situation we saw play out over the last few years. Many of them relaxed for a while or took a break, and now we’re seeing them get back out there in a serious way.

Dana Trotter: As summer approaches, the mood of the Hamptons home sales market is a mix of activity and caution. In the high-end, properties priced at $10 million-plus continue to see interest and activity, indicating a robust demand among affluent buyers. However, the $6 million to $10 million range is different in that it is driven by a lack of inventory. Buyers in this segment are facing challenges in finding suitable properties.

In contrast, the market for homes priced under $6 million is seeing some price softening. An increase in available inventory here has provided buyers with more options. Additionally, this price range seems to be more sensitive to interest rates, which is influencing buyer behavior, as potential purchasers weigh the costs of borrowing against property prices and sellers weigh the cost of upgrading with higher interest rates. Overall, while high-end sales remain strong, the mid-range market is still adapting to supply issues, and the lower-end market has adjusted to shifting economic conditions and interest rate changes.

Deborah Pirro: There is excitement in the market for beautiful well-prices properties. Waterfront remains ever popular. Turn-key waterfront remains a fan favorite!

Ed Bruehl: Excited and enthusiastic. The season always brings a new flush of energy and this year is no different. The buyers in today’s market are incredibly sophisticated and savvy. So the product has to be perfectly priced and positioned in the marketplace or it gets overlooked. Correctly positioned properties get bidding wars and interest.

It’s not new: positioning and pricing are still paramount. If the product isn’t perfect, it needs to be priced accordingly. If the product is perfect and positioned correctly, the premium can be captured.

In the past, renovations and build-outs could be done more affordably. Now, the price to build and the price to renovate are higher, and people are looking for something a little bit smarter, a little bit smaller, and a lot easier since more and more buyers are living in multiple locations throughout the year.

Jennifer Friedberg: The luxury market tends to move at its own pace, and with limited inventory, there remains a significant number of buyers looking for properties. On the seller front, properties under $3 million move the quickest, especially those that are in move-in condition and priced correctly. However, the pace of transactions that we experienced during COVID times has certainly shifted downward, and bidding wars have slowed down.

The Fed interest rate has held at 5.5%, a more than 20-year high, since July 2023. How has that influenced the market?

Ashley Farrell: At first, buyers relied on early reports that 2024 would bring a handful of interest rate decreases — that simply hasn’t panned out. Many of those buyers paused their life plans and homebuying search while waiting for these rate declines. When that didn’t happen, buyers adjusted expectations, and it seems many have decided to jump back into the market. Buyers understand they can always change their rate down the road, but an opportunity to buy a specific home may not present itself again.

Robert Lohman: The rate change has stopped owners from elective transferring of property. The rate change makes trading up or down counterproductive as the rate change offsets the seller’s gain in most cases.

Judi Desiderio: Most of our deals are all-cash transactions. The interest rates negatively impact the businesses that our clients and customers own, so there is a rippling effect.

Terry Cohen: Interest rates have had a modest impact on the market, but overall, their influence has not been particularly significant in the Hamptons micro market.

Todd Bourgard: You have to keep in mind that in the Hamptons, many deals are all cash, so we tend to feel the influence of the interest rate a bit less. For other deals, I find that people have certainly gotten used to the interest rate where it is, and it’s not affecting their decisions. If someone wants a house in the Hamptons, they make the purchase. It’s a competitive market, and they aren’t going to wait for interest rates to tick down another half of a point.

Dana Trotter: The 20-year high interest rates have had some impact on the Hamptons real estate market, primarily in the under $5 million segment. With higher borrowing costs, potential buyers face increased financial burdens, leading to reduced demand in this price range. Sellers in this range also face the task of giving up low interest rates if they want to trade up their properties. This has prompted some price changes in this segment, however the increase in inventory is also a driving factor here.

Deborah Pirro: Buyers are a bit more discerning. They continue to look for value, testing pricing with their offers as they proceed cautiously.

Ed Bruehl: I don’t think that affects our market profoundly. Our market does not play by the national averages here in the Hamptons.

Jennifer Friedberg: The Fed’s interest rate hikes over the past couple of years have definitely impacted the market. However, after a period of adopting a wait-and-see approach and sitting on the sidelines, buyers have decided it’s time to move, knowing they can refinance at some point. Sellers, too, who had been waiting to sell and either trade up or downsize, have also decided to move forward with the knowledge that refinancing options will be available down the road. This renewed activity from both buyers and sellers is helping to keep the market dynamic, even amid changing economic conditions.

Geoff Gifkins: Many buyers have held off making purchases in hopes the rates will come down. Historically, though, when interest rates drop home prices increase, so buying in the down market will have its benefits long term.

What advice do you have for buyers who are waiting for interest rates to go down?

Ashley Farrell: If you’ve heard it once, you’ve heard it a million times. Date the rate. Marry the house! In other words, assuming you’re qualified to purchase your dream house, when it goes on the market, grab it! Real estate and the economy are cyclic. There will be a time when interest rates fall and there will be an opportunity to refinance, but the opportunity to buy your ideal home is unpredictable. That house you’ve always had your eye on is finally for sale? It may not come to market again in your lifetime — especially in the Hamptons, where properties are often passed down from generation to generation.

Robert Lohman: The rate change has slowed the market a bit. This has created a more relaxed atmosphere allowing buyers to have a bit more control in the purchasing process. People who waited in 1973 had to wait 15 years till 1989 to see the lower rates. Better to deal with the present.

Judi Desiderio: If you need to buy or sell, waiting for interest rates to come down half a point or a point with the economic climate that exists ends up being a mistake. Because prices are not going down.

Terry Cohen: Buyers continue to purchase homes that make financial sense for them, regardless of interest rates.

Todd Bourgard: My advice is do not wait — buy now. Investing in the Hamptons has always been a smart decision. It’s not only a beautiful place to live, but it’s also an incredible place to invest your money. The market remains competitive and despite the interest rates, the price points are still clicking up. Historically, the longer you wait, the more you are going to pay.

Dana Trotter: For buyers considering waiting, the best advice I can give is to buy now and consider refinancing later. The Hamptons market is one of few that has continued to grow and gain value year over year. If interest rates do eventually drop, you could be trying to buy with others who sat on the sidelines, which may make the market more competitive and drive prices up. Securing your dream Hamptons home now allows you to get ahead of potential future market pressures, ensuring you don’t miss out while waiting for lower rates.

Deborah Pirro: Do not wait. Real estate is not only a place to live, but a diversification tool and forced savings, and provides tax advantages. When rates drop back you can refi. The value of your property will increase, and you will have that much more equity because you purchased now.

Ed Bruehl: Never wait. Always hustle and try to find the best deal in that market’s window. There is always a great deal, if you take the time to know the market with a great local broker and then get out here to see and negotiate on the good ones!

Geoff Gifkins: No one can ever time the market, and waiting for interest rates to drop could end up costing more as time passes. It is a buyers’ market right now; sellers are engaged so now is a good time to find the right home.

Have you or your company begun to use artificial intelligence to aid in your work?

Ashley Farrell: Yes, Corcoran employs an exclusive product which utilizes artificial intelligence through social media to target the most likely buyers for a seller’s property. To learn more, let’s work together!

Robert Lohman: Not on a daily basis.

Judi Desiderio: AI is here to stay, and as time moves forward, it will become more integrated in every business, including ours.

Terry Cohen: Yes, AI has been a valuable tool for both me and our company, particularly in marketing and advertising. It is here to stay, and we will continue to leverage it to benefit both buyers and sellers through data analysis.

Todd Bourgard: AI is profoundly transforming the way we do business, and it’s so important that we keep our agents ahead of the curve and supported. Corporately, through our PropTech investment arm, New Valley Ventures, Elliman is deeply committed to developing and investing in AI-powered tools and technologies to give our agents an edge as they grow their own businesses. Recent additions to the tech toolkit we provide to our agents include StudioPro and AdPro — which is our new custom-built digital ad publishing solution that uses AI to help agents more effectively promote properties, target potential buyers, expand their reach and generate more leads.

Our agents are also certainly using AI to help them streamline content creation from listing descriptions to email generation, social post creation, blog posts and more. While AI can be a great support in these endeavors, and save agents both time and money, I think it’s also important to remember that the human element, agent expertise, a personal touch and connection to the client will always remain hugely important to our business.

Dana Trotter: Absolutely, we use AI daily, assisting us with tasks ranging from copy to coding, marketing and data analysis. Leveraging AI helps us save time and become more effective and efficient in our work. However, it’s important to approach AI with some caution too, especially out here when some of the AI responses don’t seem to make sense. The data available in the Hamptons isn’t as robust as in the metropolitan areas, so relying solely on AI can lead to inaccuracies. It’s crucial to have a deep understanding of the local market and to trust your broker’s expertise. You have to be diligent and understand that AI can be helpful but it is also prone to errors without someone with knowledge and expertise reviewing it.

Deborah Pirro: We have been using AI for a while. It’s fun. It’s quick, and it allows us to be more creative. I don’t think it will ever replace the human component of real estate.

Ed Bruehl: Every day, every second, every minute. Our industry is at the cutting edge in regard to the need for and use of these tools. From my perspective, my mornings are all digital, which helps me organize my face-to-face. From mapping to task management to follow-ups, our industry is always growing ahead with the newest technology.

Jennifer Friedberg: Yes and yes. Compass continues to be at the forefront of technology, and personally, I have incorporated AI tools and techniques into much of my business to expand and transform at a quicker pace. There are so many tools available that I could make it a full-time activity just taking it all in and learning. I’m thankful for the tremendous resources provided by both Compass and industry professionals and thought leaders at REALM, the community of top-producing luxury real estate agents across the United States and internationally. However, in real estate, much like in many other service-oriented businesses, the personal touch and the cultivation of strong relationships are still crucial.

Geoff Gifkins: AI and blockchain technology is still in its infancy; however, many agents use it for ad copy, social media, graphics and lead generation. Over time with greater adoption, we will see greater use cases with mortgages, closing documents and title recording ultimately removing a lot of the friction, and delays in processing.

Has the inventory level improved since last year?

Ashley Farrell: The level of inventory from last year to this year doesn’t feel tangibly different, but I’d say there may be slightly more homes for sale presently. Nevertheless, the buyer pool remains strong, and often homes are selling before they come to market. I think it is important to note that like buyers, sellers too are beginning to adjust to the new normal and higher interest rates. These higher rates have prevented some homeowners from selling, as today’s rates would make their next purchase a financial reach. However, those who want to sell are beginning to adjust expectations. They’ve realized they can’t wait forever and don’t wish to adjust their life plans according to volatile interest rates.

Robert Lohman: With over 30 years experience selling homes in the Hamptons, our inventory for the last two years has been less than a tenth of what I am used to working with. For most of 2023 the added inventory and new deals remained at an even pace. Thankfully, over the last few months the inventory has been growing a bit faster than sales. I have also seen more price reductions in the last six months. There was a lot of aspirational pricing from the COVID-pushed market. In 2020-2023 we often saw deals above the asking price; now I am seeing more deals a bit under the ask.

Judi Desiderio: Inventory levels have improved, and that has helped to increase sales volume.

Terry Cohen: Inventory is increasing in both land and land-value homes, and developers are resuming production of new properties. This reflects renewed confidence and investment in the real estate market.

Todd Bourgard: Without a doubt. We have seen our inventory come up about 20 percent since last year. A lot of people were waiting on the sidelines for interest rates to come down and just got tired of waiting. More sellers have decided to go ahead and list their homes and make the purchase of another one. A large percentage of sellers in the Hamptons don’t leave. They are either downsizing or going bigger, but they want to stay here. Now that other houses are becoming available and there is more for them to choose from, they are more apt to list themselves. Before, with inventory at an all-time low, there was just no inventory for them to look at. That’s changing now.

Dana Trotter: Inventory levels have shown some improvement, particularly in the $3 million to $5 million range, where there has been an increase in available properties. However, the $6 million to $10 million range continues to remain light. While the market seems to be moving toward a new equilibrium, it is uncertain if we will return to the pre-COVID days of having 1,500 to 2,000 active listings. The shift in the working environment, with more people spending time in the Hamptons more frequently, suggests that inventory dynamics will continue to differ from past patterns.

Deborah Pirro: Inventory is definitely increasing slightly, offering buyers more to view. That said, if it’s turnkey and well priced it’s gone as quickly as it appeared.

Ed Bruehl: It has improved. There are lots of listings that a good broker will be able to show you — including old listings, off-market listings and hidden gems. Working with an agent who knows every listing available, you’ll find your great deal.

Jennifer Friedberg: Yes, sales inventory has improved compared to last year’s historic low. While there are still fewer options than in prepandemic times, we are seeing more inventory coming on. For example, in April 2023, 106 properties were listed, whereas in April 2024, there were 187 properties listed, marking a 58 percent year-over-year increase.

Geoff Gifkins: We have seen an increase in inventory over the last few months which is typical in the spring season. Inventory is still historically low, and buyers are taking time to find the right property for them.

How has the 2024 summer rental market performed?

Ashley Farrell: I felt the rental market WAS fantastic for 2024. Between August 2023 and February 2024, prime rentals were flying off the shelf. Personally, my numbers hit 2020 COVID levels ($3 million-plus rented), however, after February there was a distinct decrease in activity. The demand seems to have bottomed out, and those renters who’ve waited are in some cases getting steals. To those who booked their rentals over the winter: before you feel badly about paying market value, realize those who wait may get a deal, but the options are far from the cream of the crop.

Robert Lohman: My rental market started very strong and then slowed around the spring holidays. With owners holding on to their homes, there seems to be more rental inventory in general. Many new homeowners have come from our rental customer base.

Judi Desiderio: The rental season has been very complex and started out with a bang, then was quiet during the winter and has since picked back up.

Terry Cohen: The rental market is mixed. The high-end segment is performing well, with new or recently renovated homes achieving strong numbers. However, areas with high inventory of older homes are struggling to match previous years’ figures. Recently, there has been an uptick in interest as the season begins.

Todd Bourgard: From our perspective at Elliman, it’s performed very well for us. In March and April, Elliman doubled the number of rentals we did last year in each month. There is excitement for the season, and it’s shaping up to be a good one. It seems like this year, more people are staying in the U.S. whereas last year, everyone was traveling abroad. There is no doubt the Hamptons is a top destination and that people want to be here, enjoying the beautiful beaches, world-class dining, shopping, and all the East End has to offer.

Dana Trotter: The 2024 summer rental market appears to be noticeably softer than in previous years. There has been an increase in the inventory of available rental properties, which has led to price reductions of between 10 and 20 percent. For those negotiating early for 2024 rentals, as a landlord, you may have done well securing early tenants. The other noticeable trend this year has been shorter rental periods, with more tenants opting for two-to-four-week stays rather than committing to a full season. This shift reflects changing preferences and market dynamics, possibly influenced by economic factors and evolving lifestyle and travel choices that were not available during COVID.

Deborah Pirro: Q4 of 2023 was a very successful period for 2024 summer rentals. As 2024 has progressed, once again the market has become saturated with rental properties and those not priced properly remain available.

Ed Bruehl: The rental market in the Hamptons has undergone a profound change, so I’m hesitant to answer it just from one perspective. The overall rental market is at odds with the summer rental. From the brokerage perspective, the rental market likes to get Memorial Day through Labor Day, but the new customer wants to rent for less than the two weeks allowed. The demand for short-term rentals that we can’t offer has never been higher. And the annual rental demand and price for a ~2,000-square-foot, three-to-four-bedroom home has never been higher.

Jennifer Friedberg: The 2024 summer rental market has seen dynamic activity. In late 2023, we experienced strong renewals from the past season, and higher-priced rentals moved quickly as clients secured the best properties early. In early 2024, we signed numerous leases as those who traveled internationally from last year decided to fully enjoy the Hamptons this summer. That said, we are seeing people rent for shorter periods versus the entire season. Currently, we still have some quality inventory available at most price points. While tenants are trying to negotiate heavily, many landlords are holding firm or open to only slight negotiation but are unlikely to give it away, creating a taxing yet busy, vibrant and competitive market atmosphere.

Geoff Gifkins: It was a slow start to the season although we have seen some record rentals on Meadow Lane. On the whole the season has been steady so far.

What are you most looking forward to this summer?

Ashley Farrell: So much! For one, our “summer friends” returning for the season – it’s always so nice to see everyone, catch up, and have a lively social life again — barbecues, tennis matches, and beach volleyball nights. But perhaps, what I look forward to most is the luxury of walking out of my house in shorts and a T-shirt! How nice it is to forget about coats and cold-weather accessories.

Robert Lohman: I am looking forward to great farm fresh produce, superb beaches and the amazing light on the East End.

Judi Desiderio: Enjoying the beauty of the East End with family and friends.

Terry Cohen: Summer here is always enjoyable with activities like golf, pickleball, and boating. I believe that once everyone arrives, we will see a very active sales market. This expectation is echoed by my personal customers.

Todd Bourgard: I’m looking forward to a nice steak at Bobby Van’s, a good brunch at 75 Main, and a beautiful evening enjoying live music at Dockers. Of course, I’m also hoping to spend as much time as I can at our beautiful beaches!

Dana Trotter: This summer, I’m most looking forward to enjoying the growth and excitement surrounding The Agency Hamptons. The new location is fantastic, and getting it up and running has kept us incredibly busy alongside my own sale and rental activity. The summer months are always a highlight for me, with the warm weather, local food stands, beach days, boating, horse shows, and the hustle and bustle of a busy season adding to the vibrant atmosphere of the Hamptons. What’s not to love about the Hamptons in the summer? Well, maybe the traffic!

Deborah Pirro: Looking forward to longer days, garden time, beach days, annual events we attend and just time with family and friends

Ed Bruehl: Slowing down and appreciating what makes the Hamptons enjoyable: a quiet beach walk, seeing friends around the village, gardening, biking, and mostly, not taking for granted the natural beauty of this special land.

Jennifer Friedberg: This summer, I’m excited to reconnect with friends and clients over dinner and drinks, hosting intimate dinner parties, and attending a variety of events. The Hamptons’ rich arts scene, morning beach walks, family weekends, farm stands, and showcasing exceptional properties are all on my agenda. We’ve already enjoyed some gorgeous days leading up to Memorial Day weekend, highlighting the best of the Hamptons. With stunning beaches, amazing sunsets, great restaurants, vibrant outdoor activities and the North Fork day trips, the atmosphere here is unmatched. I was in Sag Harbor Village last night and the energy was palpable, bumping into so many friends. I love the water and plan to spend more time at the beach, working out, playing golf, and getting back to tennis. Plus, there’s nothing better than previewing and showing beautiful homes that shine in the summer. One event I always love is The Hampton Classic, though it marks the close of summer. The Hamptons is truly special, overflowing with excitement and beauty, especially in the summer.

Geoff Gifkins: It is always good to see the influx of people enjoying the places we often take for granted living out here full-time. The Hamptons are such a beautiful landscape and a great place to be for the summer.