Key Points
This version of the article first appeared on CNBC’s Inside Wealth Newsletter. This is Robert Frank, our weekly guide to Net-Worth Investor and Consumer. Sign up to receive future editions directly in your inbox. According to brokers, Hamptons summer rentals are off to a cold start to the season. Hamptons rentals have fallen 30% from the same period in the past few years, according to Judi Desiderio of William Raveis Real Estate. Brokers focusing on ultra-high-end rentals say their rental business is down by 50% to 75%. “People are holding on to the money,” said Enzo Morabito, head of Douglas Elliman’s Hamptons-based Enzo Morabito team. “They don’t like uncertainty.” Of course, Hamptons renters often wait until the very last minute to book rentals for July and August. According to brokers, this year could start even more due to cold rainy weather in May. Some tenants may also refrain from doing better deals in the Hampton market, which has become much more expensive after Covid. But brokers and tenants have personally mentioned stock market volatility and economic uncertainty caused by stock market volatility and constantly changing tariff environments, even those who are hoping to take a more expensive Hampton holiday this summer. After the post-election happiness in the market late last year, brokers surged interest from potential tenants in January and February. However, as spring arrived, early attention did not lead to rentals, along with the announcement of tariffs in April. Morabito said he represents several homeowners with large waterfronts and luxurious facilities that would normally be rented by March or April. Today they are still available. He said homeowners who rent three or four homes in the Hamptons over the summer may start questioning their investments after this summer if tenants start to emerge. On the positive side, an increase in non-stock means potential bargains and choices for renters. According to the broker, some listings have begun to cut prices by 10% to 20% in the hopes of saving summers. Some homeowners have increased their flexibility and allow for shorter stays of one or two weeks in the hopes of getting a tenant. Gary DePericia, my Hampton home, said the best homes in Hampton are usually rented early in the year. “But this year, there are great rentals available in every town, from Southampton to Montauk.” While tariffs and economic uncertainty could play a role in the recession, he said that tenants seemed to have been waiting longer each year and are probably trying hard for a better deal. Eventually, he said, they ended up borrowing. “I didn’t think a lot of people had put off the decision or what they were going to do, go to Europe or the West Coast,” he said. “You’ll find them wanting to be in Hampton. They have a lot of friends and colleagues here and start running around for rentals.” Desiderio said the combination of weather and harsh economic headlines has been a slow start that quickly turns around. “I think this year there was a lot of “dark noise” financially and geopolitical. The weather didn’t help us think about summer,” she said. “By the time July 1st comes, there’s no doubt that all rentals will be taken this year.” When it comes to home sales, the Hamptons real estate market remains fairly strong, despite relatively low stock. Sales in the first quarter fell 12% from a year ago, but median sales prices rose 13% to a record $2 million. Brokers say they will sell it immediately if the Hamptons quality home prices are correct. They added that a surge in high-end sales in Manhattan over the past two months could also raise the Hamptons market. “I just bid on a $18 million home with two Canadians,” Morabito said. “When Manhattan is alive, we will always obey.”
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