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Teardowns Are Fueling the Hamptons Market

You know what they say about land—they're not making any more. So if an existing Hamptons house doesn't meet the needs of today's high-end buyer, hasta la vista, baby. Mitchell Pally, chief executive officer of the Long Island Builders Institute, said in Bloomberg news yesterday, "Because of the scarcity of land in the Hamptons on which you can build there today, the land is worth more than the house." In East Hampton town, building permits are up 36 percent so far this year. Thomas Preiato, the town's chief building inspector, says, "Knockdowns and rebuilds and resells are going like hot cakes. This has always happened out there, but not to this extent. It's just crazy."

The rush is on now for new houses to be built before bonus season on Wall Street early next year. That segment of buyer wants a large new house with all the latest amenities and the newest technical advances.

A Southampton developer, Rich Perello, tore down a c. 1804 house on 3 acres in Bridgehampton that he purchased for $4.25M. Replacing it will be two new 8000sf houses with pools and tennis courts that he will market at $8M each. Perello is using flooring and beams from the old house in the new homes, and says, "The fact that there was a house on it actually decreases the property value because you have to pay to knock it down." Hasta la vista, old house.
· Hamptons Sales Surge Fuels High-End Home Tear-Downs [Bloomberg]