The Hamptons, once the favored vacation destination of New York City’s wealthy elite, is seeing home prices plummet and high-end properties sitting on the market for months, The New York Times reported.
The median sale price of a Hamptons home has fallen 7.9% to $860,000, according to a report from Douglas Elliman Real Estate. That puts Hamptons home sales at their lowest levels in seven years, as Business Insider’s Gina Heeb previously reported.
This luxury real-estate slump can be traced, in part, to Donald Trump’s 2016 federal tax reform, as the Financial Times’ Ben Foldy reported. The new tax laws make it more expensive for homeowners to own luxury homes because they can deduct only $10,000 in state and local taxes from their federal income taxes.
“The high-end of the Hamptons housing market continued to move slower [in the first quarter of 2019] in the aftermath of the new federal tax law,” the Douglas Elliman report reads.
Read more: People aren’t buying the most expensive homes in the Hamptons. Here’s what it’s like living in the ritzy seaside community’s priciest ZIP code, where the median home price is $5.5 million
The most expensive homes for sale in the Hamptons are suffering the most, Laura Brady, president and founder of Concierge Auctions in Manhattan, told The Times. The priciest homes sold in the Hamptons in 2018 sat on the market for an average of 706.7 days before finally selling, according to a report from Brady’s company.
Part of the problem is that the wealthiest buyers — those looking at homes priced at $10 million or above — have already owned homes in the Hamptons for years, according to Zachary Vichinsky of Bespoke Real Estate.
And other luxury buyers who might’ve previously bought in the Hamptons are instead looking north to places like New York’s Hudson Valley and the Catskills, where prices are more affordable and buyers value the proximity to Manhattan, outdoor activities, and stunning landscapes, as Business Insider’s Madeline Stone reported in 2017.
“The lower Hudson Valley is certainly easier to get to than the Hamptons,” Richard Ellis, owner of Ellis Sotheby’s International Realty in Nyack, New York, told Business Insider at the time. “People who buy on our side of the river are not ‘keeping up [with] the Joneses,’ so to speak. They’re looking to impress themselves, not others.”
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