Weak Dollar Has Hamptons Rentals Soaring

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Hamptons home sales have plummeted since the first quarter of last year, but brokers say this summer’s rentals are stronger than ever, fueled by an influx of international tourists lured by the beaches and the weak dollar.

“We have had an astronomical rental year,” the president of Town & Country Real Estate, Judi Desiderio, said, adding that her firm has rented some 19% of its properties this year to international clients, compared with just 5% last year. “Main Street is going to sound like the lobby of the U.N.”

There were 400 houses sold on the East End in the first quarter, a drop of more than 41% versus the same period last year and of 35% from last quarter, according to a market report published yesterday by the appraisal firm Miller Samuel and brokerage firm Prudential Douglas Elliman.

“There’s more inventory on the market, and people are taking longer to make decisions,” the chief executive of Prudential Douglas Elliman, Dottie Herman, said. Rentals, however, are “better than last year,” she said, in part because many would-be buyers have chosen to rent instead.

The Southampton branch of Engel & Völkers, a Hamburg-based realtor that opened its first Hamptons location in 2005, has seen its overseas rental business balloon by some 10% this year, the owner of the Long Island franchise, Franz Muster, said. For Europeans, “it is less expensive to be on vacation in the Hamptons right now than St. Tropez,” he said.

Long Island’s glamorous East End, home to celebrities such as Alec Baldwin and Billy Joel, is also well known to jet setters, he said. “There’s a lot of buzz and excitement about it,” he said. “For people who travel, it’s one of the places in the world to go.”

The Hamptons’ idyllic villages and long beaches offer an experience “totally different” from European vacation destinations such as the South of France, Mr. Muster, who is Austrian but moved to Long Island some 25 years ago, said. “The endless beaches, the shingle houses, the way of life — people love that.”

An associate broker at Corcoran, Nan Dillon, recently leased a four-bedroom house in Amagansett to a French family for three weeks at the end of August. Unimpressed by the pool, cable TV, and other amenities popular with Americans, the Parisian family focused on the Hamptons’ lush scenery. “They wanted to walk to the ocean,” Ms. Dillon said. “They wanted to experience the most beautiful beach in the world.”

In France, month-long August vacations are the norm, she said: “They know how to vacation.”

Mr. Muster said many of his international clients are looking for two-week or month-long accommodations rather than the whole season. While it used to be that short-term rentals were hard to come by, they are now more commonplace, he said, making it easier for those coming from overseas. With the end of the rental season now approaching, these short-term deals are also easier to find because landlords are anxious to find renters.

It isn’t just the rental market that is benefiting from the international community. Hamptons sales to overseas buyers have also increased, Corcoran’s regional senior vice president for the East End, Rick Hoffman, said.

“We’re seeing more overseas investment as buyers, and probably we’re going to see that grow exponentially because we have an increase in foreign renters this year,” he said. “Renters turn into buyers.”

Shorewood Manor, a 23-room Victorian mansion on a peninsula jutting into Shelter Island Sound, sold yesterday to a Swiss buyer for $12.4 million, Corcoran representatives said.

Mr. Muster said he expects the number of foreign buyers to reach 20% of the total by the end of this year, up from roughly 10% last year.

A vice president at Corcoran, Mark Schindler, recently sold a newly constructed five-bedroom Westhampton house to a British couple. The pair was torn between a condo in Manhattan and a country house in the Hamptons, until the wife put her foot down, Mr. Schindler said. “She told her husband, ‘I don’t want a condo — I want a nice house in the Hamptons,'” he said.

Other buyers view Hamptons homesteads purely as investments. One of Mr. Schindler’s clients is a Dutch investor looking to buy a corporate house for his company and several East Ed properties to renovate and flip. “His exchange rate is so strong — it’s a very nice discount,” Mr. Schindler said.

Overall, the East End’s sales market saw modest gains in price during the year’s first quarter. The median sales price of $790,000 increased 1.9% from $775,000 during the same period in 2007, according to the Prudential report. High-end properties in the Hamptons did particularly well, with the average sales price in the top fifth of the market jumping 26%, to $6.3 million from $4.99 million in the same quarter of last year.

“Second home markets tend to be more vulnerable in periods of weakness,” the president of Miller Samuel, Jonathan Miller, said. “But the high-end market, because the availability of properties is so limited, continues to see a lot of interest.”


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