The Economy is Down But it’s A Great Time to Buy
Friday, December 19th, 2008When I propose to my customers that “now is a great time to buy even when the economic forecast is dark and gloomy with more chances of snow,” they look at me like I am crazy and ask “why?”
“Well it really is!” I respond.
Listen. I know the economy is scaring the living daylights out of everyone. Even a man like myself who is a broker in one of the most successful real estate markets in the country has had seeds of doubt. The Hamptons real estate market hasn’t seen a time like this in many moons. The exceptional growth and strength of the Hamptons real estate market has been proficiently heading upward at amazing leaps and bounds throughout the last decade. The most shocking figure to me is that even since 2006 that Hamptons real estate market was still growing. While the rest of the country was starting to catch a cold economically, the Hamptons still boomed along. Even in the later parts of 2007 and throughout the first half of 2008, the Hamptons market was still far from cooling. As recent national economic figures have stated, the economy has been in a recession since last December and during this time the Hamptons market has grown not detracted. It did not just grow slowly either, it set records in upper tier sales and the 2008 rental season was the best in history. The Hamptons real estate market does not have a glass chin. The Hamptons real estate market is like Muhammed Ali in his prime. The Hamptons market like Ali could take punch after punch and not go down. An investment in the Hamptons has the best chance of rapid appreciation no matter the economic climate.
Right now is one of the best times to buy in the Hamptons within the last decade. There are just incredible deals and values that people haven’t seen in years. You just have to find them.
Many sellers in the Hamptons have enough funds to weather this economic catastrophe. Many Hamptons sellers are smart investors and very successful in whatever profession they were in or still are in. They do not need to flex there price or drop their asking rapidly because they simply probably don’t need the money. Because the Hamptons has so many of these “type A” sellers who don’t really have to sell is why you are not seeing a huge decrease in prices in the Hamptons. Why many buyers think, “why not wait until prices deflate and drop?” I strongly believe that is the wrong approach. Why wait for something that may never happen? The Hamptons have lowered slightly and may lower a little more so, but at the end of the day the Hamptons is the Hamptons.
There are great deals out there and sellers who need to sell. You just have to look. The best deals I am seeing are in “new construction.” Many builders kept building throughout the last two years because the Hamptons real estate market seemed to be weathering any economic report or any economic doom and gloom that was sweeping the nation. The Hamptons stood strong and kept taking everything on the chin. The builders kept building deep into 2007 and even into 2008.
It took a catastrophic collapse on Wall St. to slow the Hamptons real estate market. I strongly believe that the Hamptons real estate market has only got the wind knocked of it. It’s going down to it’s knees to get it’s breath. It’s then going to rise to it’s feet and be stronger then ever. That’s why now you can really find something incredible at an incredible price before the market rebounds. The best deals are the new construction spec houses. Right now there are amazing homes south of the highway, some of even pondfront like this home below that you can get for way under what the market value for the home was 6 to 12 months ago. When the market recovers you’ll be sitting pretty. You would have scored an amazing deal.
*This Newly Constructed Spec House listed with Susan Breitenbach overlooks gorgeous Sagaponack Pond. The home is located deep in Sagaponack south, close to ocean beaches. It was originally $9.995.000 and is now available for $5.995.000. A new construction spec house of similar qualities and characteristics traded down the street last summer for $19 million.
As my father always told me,
“Buy into the teeth of the market not the meat.”
A lot of builders overextended themselves and bought into a meaty and healthy market. Now with the financial markets in turmoil and not as many Hamptons buyers, these once sitting pretty builders are now overextended and are more negotiable then ever. These builders want out. And like many hard learned lessons, I don’t think these builders will make these mistakes again. Next time they build, they will make sure not to get too ambitious. They won’t overextend. They will do spot projects and make sure they get their asking price. When a builder has two or three houses just sitting on the market, not to mention a tough market and dreary economic stats, you get a high chance of negotiability. The probability of getting an amazing deal on a newly constructed Hampton home has went through the roof. If you are in the market for new construction, now is the time to buy.
-Matthew Breitenbach
