Consensus among Curbed readers is about as rare as being able to see Venus pass across the face of the Sun. However, last Thursday's Open Thread question?What's up with all these overpriced homes in The Hamptons??proved that there's at least one thing everyone can agree on: Something is dramatically off about home prices in the area.
Here's a quick rundown of the explanations readers offered as to why everything seems priced like the real estate bubble didn't pop:
"One word: GREED. And this greed has not been good for The Hamptons. The pipe dreams about how buying a home in The Hamptons can be the "best investment you'll ever make" has gone up in smoke..."
"You are supposed to buy the house if you make money. You do not buy the house to make money. This is the trend of thought that brought this country to the brink of depression in 2008."
"The market seems to be a little better now than the past 3 years. But it's the memory of how things exploded about 7 or 8 years ago that makes for unrealistic pricing now. The Hamptons are a good market but it's optional to the wealthy with airplanes."
"True story - I've been looking for a second home for a while; finally find a nice house on 1 acre+ late last year which was on the market for over a year. I'm told the seller is highly highly motivated. I bid 90% of his offer price in cash, close in 30 days; I figure the guy would jump at my bid. Well, guess what - no deal done."
"It's the old greater fool theory: I will buy a house today at a high price and sell it to a greater fool at a higher price."
"I'm late to this party...but I echo you all...
(a) with rare exception..brokers pander to sellers and just end up burning thru their (and their firms) advertising dollars only to lose the listing when it doesn't sell.
(b) There is a vast oversupply of brokers so buyers can always get some idiot broker to list the house at "THEIR" price...instead of the market price. Brokers then waste time and money until they lose the listing. Hence the Ocean Ave EH home above that's been on the market for about 4 years.
(c) The party won't be over until interest rates go up and chop 40% off the value of these homes. Instantly.
(d) Most brokers are in the rental business..that is "renting" their own house and covering their costs for the year...thus the survive even if they never earn a commission from outsiders.
(e) Most sellers think their home is "great" and "unique". In reality, most shoud be commodity priced (land value + cost to build - repairs reno needed to make it sparkle). There is nothing unique about Deerfield Rd and NW Woods homes..price them to sell folks.
(f) Corallary to (c) once interest rates jack up..the poor souls with variable mortgages will give the keys back to the back which will make the Hamptons home situation like those foreclosure minefields in the SunBelt."
If you've yet to drop in on the discussion, it's really worth checking out. · What's Up WIth All These Overpriced Homes In The Hamptons? [Curbed Hamptons]
· Previously on Thursday Open Threads [Curbed Hamptons]