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[Three Cents Worth] Forget Spring; the Big Stuff Sells at Year End

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But why?

Since the Hamptons market seems to be considered a high end second home market by many, even though 51% of 1Q16 sales occur below $1 million, I thought I’d look at each year over the past decade and see when the big sales (≥ $ million) actually happen. Using the data from the Elliman Report: Hamptons North Fork Decade 2006-2015 that I author, I weighted sales activity by quarter (that is, an average quarter would have a 25% share of all annual sales if all quarters were equal).

Prior to the financial crisis, the market share in each year’s fourth quarter was less than 25% of annual sales. In other words, the market for sales over $5 million was quiet in the winter before the financial crisis began with Lehman in September 2008 (I know, I know, my blue demarcation line is in between 2008 and 2009 but it looks better). After the financial crisis began, the fourth quarter suddenly became the biggest quarter of the year for high end sales. This is not about seeing more sales for the year; just more of the annual high end sales are occurring at the end of each year, poaching from the first quarter of the following year.

I think I can rationalize 2010 (Bush era tax expiration lapse that didn’t happen), 2012 (fiscal cliff) but the rest is somewhat a mystery. I would guess that rest of the years’ behavior might be attributable to concern about upcoming year’s tax exposure? I’m reaching here. Insights appreciated.