Allan Schneider IN# 37556

The burst of vibrant color from apple, pear and crabapple trees has boldly announced Spring in the Hamptons. Along winding country roads and village streets, beside gay perennials sprout the ubiquitous For Rent signs, one after the other. Summer in the Hamptons is upon us! So what can we expect from the real estate market?

Hamptons.com had the opportunity to speak with three local real estate agents who shared their insights to the present sales and rental market on the East End. The good news is: there may be bargains to be had! Well, maybe not bargains, but certainly some reasonable deals out there.

If one is interested in buying, it seems that one of the best times of the year to buy is now. Cee Scott Brown, one of Allan Schneider's top producing brokers, has discovered that a number of people who used to rent for the summer – are now asking themselves why they should rent, when money paid for a rental can be spent as a down payment to owning a house. Christopher Burnside of Brown Harris Stevens agrees. "Wall Street did very well – bonuses were up. A lot of Wall Streeters are taking money out of stocks and purchasing real estate because they can use their money now and get the tax benefit."

Burnside wonders why anyone would rent these days when interest rates are at 5 ½%. He firmly believes it only pays to rent if one rents a five million dollar house for $150,000 for the season. "In this case you couldn't own the house for what it costs to rent." One good reason to buy now, he believes, is that houses that have been on the market through winter and haven't sold have been reduced - giving spring buyers an opportunity to find good values.

Tracy Loggia of Prudential Douglas Elliman has been a resident of the Hamptons her entire life. Although she agrees that there may be values to be found this time of year, she doesn't believe that, overall, prices will drop. "People are out there looking. This is the Hamptons market. There are fewer deals to be had because there is a finite amount of houses and land available."

Prudential #49580

"Not one of our agents believes the so-called bubble will burst given that the Hamptons market has been very active." Brown believes that if the economy were to turn, it could possibly have an impact here but unlikely given that many Hampton's homes are second residences. "If there was a downturn of the economy, I don't believe it would create a mass sell-off of property. However, while there are people who have the money to buy, property out here is getting scarce and those buyers who want to get their foot in the door know they have to step up. A lot of people are not hesitant to do this since, right now, real estate is probably better than the Dow." He recalls the dreadful market in the early 90's yet recalls that in the Hamptons there were all sorts of transactions. Just at a lower price point. "There is always someone looking to pick up a bargain." Burnside agrees. "If there is a bubble burst, it won't affect South of the Highway or close to the water. People who are buying at these prices are not intimidated by a higher interest rate or any kind of bubble scare because they have the money and want to be in a certain area."

The Hamptons reminds Loggia of Tribeca twenty-five years ago. "The Hamptons is becoming, more and more, a year-round residence for people. There is a transition taking place. Twenty-five years ago, no one wanted to be in Tribeca except for artists. It is now one of the hottest markets in the city. Out here you can see the upgrade of homes, the amount of new building going on, the improvements in the schools, the existence of private schools and businesses that have opened up or expanded. There are more opportunities out here - providing the ability to live here year round."

So where do you go if you are on a budget? While there may have been areas that were less desirable than others for investment purposes or living, that may be less so now. Brown sees "builders buying lots in areas we never thought spec houses would be going up. And they are being purchased. Areas that seemed less desirable because of their location, or the houses that surrounded them or other physical detriments – like the Majors Path dump – have become less and less paramount as land and property become more sought after and less available." Brown, who specializes in waterfront property, believes the best investment is still South of the Highway. And of course anything on the water. "Anything on the water is going to hold its value because they aren't making any more of it." He thinks there are still values to be discovered in North Sea and Noyac. Also Springs, although he warns of higher taxes there because of the school district.

Burnside believes North Haven is still underrated. And Sag Harbor Village, he suggests, is still undervalued compared to Southampton Village. While he also thinks there are reasonable areas of Bridgehampton to be found, he believes mostly everything has been discovered. Loggia's experience is that in every village and hamlet there are still areas that are more affordable than other sections. "North of the Highway and areas of Southampton have yet to be tapped." And she believes there is new and interesting development in Springs. "Again, there are communities changing from summer boating communities to year round residences for many people."

Brown Harris Stevens # 43409

Hamptons.com wondered if it is smarter to buy land and build or find a house to renovate. All agreed that there is little land available. "Every nook and cranny is being scooped up," Loggia says. "It costs a lot to build a house. Personally, I would buy a house on a nice piece of land and renovate. Often you are buying for the cost of the land. The house is a giveaway. I would buy now. Not wait," she adds. Brown, who sits on the Sag Harbor Village Architectural and Historical Preservation Review Board, believes in recycling houses. "I have no problem selling houses multiple times." However, Burnside, who has hands on experience in construction and investing as a real estate developer, thinks it is smarter to buy land and build. "It will be aggravating and labor intensive but the result will be more satisfying for the buyer."

And what about renting? Any affordable rentals out there? Because rentals are lagging a bit this season, you may find a bargain - with the exception of the higher end, South of the Highway, homes which are often rented by January and February. Brown advises if you are looking to save money, "…wait to rent. You will get a better price. You may have less to choose from but you can still find a good deal." Burnside suggests there are still many great houses available at reasonable rents: West Woods, East Hampton, Noyack and North Sea as well as the outskirts of Southampton.

Overall, Tracey Loggia sums it up. "Anyone who does invest here, or who chooses to live here year round, has made a wise choice in terms of future equity. This market is not going to disappear." We agree. Happy hunting!