- If you read the paper, any of the papers, you can't help but have noticed how the New York media has seen fit lately to "out" the precarious state of the Hamptons real estate market. Sales have been slow, everybody knows that, but now the question on everyone's tongue is how is the rental market going? Intrepid NY reporters have been all over the story. From the outrageous tabloid New York Post
to the more serious Wall Street Journal
and even Forbes
magazine these bastions of New York media keep falling over themselves to announce the death of the Hamptons. While they're on the scent, the rental market is slow, as someone on the front lines out here, I can think of a couple of quotes to better size up our current situation…
First, from a great luminary of American culture, Mark Twain - "Rumors
of my demise have been greatly exaggerated." What we see is a steady stream of inquiries coming into our website, sometimes in excess of 40 in a day. Many of these leads evolve into showings and some have become rental deals. Interest in renting remains strong. The difference is that many potential renters who would have otherwise pulled the trigger, or made a deal on a house, are waiting, comfortable in the certainty that as the season approaches their hand will only strengthen. Those renters that have made deals have negotiated hard. So, no, the rental market is not dead - it's just edgy. People are very cautious about parting with their money. Nobody wants to overpay.
Too Early To Judge
The second quote that comes to mind is from the somewhat less well known Dan Cook, a sportscaster, who in describing a pitched 1978 NBA
playoff game between the San Antonio Spurs
and the Washington Bullets coined the phrase, "It ain't over 'til the fat lady sings." And let me tell you - she hasn't sung yet. Due to the economic uncertainty we already talked about, we predict a late flurry of activity as the weather starts to warm and time grows short. We see prices off 15 to 30 percent on average from prior years - yes, it's an off year, but it's entirely too soon to judge.
I think we can all agree that we are in a recession and that Wall Street is feeling the pinch in particular. I don't think it's news to anybody that Wall Street money has always been a major driver of Hamptons real estate, whether in sales or rentals. So now that we've cleared that up, how is this affecting the rental market? At our firm we have seen certain changes that most of the other brokers I talk to have been confirming. Beyond the heavy bargaining, there has been one other consistent difference this year and that has been a decided move toward the short-term rental. Traditionally the rental market in the Hamptons has been about a full-season house where the typical Wall Street execs would install the wife and kids and arrive Thursday evenings and depart Monday mornings for work. Not so this year.
It's hard to know whether it's a function of the economy or of simply changing tastes and a generally changing market. The full season rental appears to be something of an endangered species. It's great for the agent who can identify and catalog a full season customer, but the sightings are getting rarer and rarer.
So what's the bottom line? Tastes are changing. People either have less money or less time or less of both and that's reflected in the rentals they are seeking. Most definitely, as we see it, it's not so much about the house this year, it's about the deal. Prospective renters seem to be willing to sacrifice that perfect summer home south of the highway to be absolutely certain that they're not overpaying. If they lose the perfect house there is sure to be another home available with a more "cooperative" owner.
So here's our free advice - take it for what it's worth - you homeowners that want to rent, that need to rent your homes, you'd better be prepared to negotiate. Offers that would be considered insulting under normal circumstances, like say a 40 percent discount to asking price, are common this year. So don't get offended, get real. After all, it is real estate we're discussing.