In the Hamptons, the chosen summer destination for the country’s elite, homes are being sold for lower prices and properties are staying on the market for months at a time, according to a report.
The New York Times reported that the housing market in the coveted Long Island, N.Y., area was “in a rut.” Home prices were said to be down. The median price for a single-family home in the area has dipped 7.9 percent to $860,000, according to a report from Douglas Elliman Real Estate.
David Nordquist, 51, a retired financier, bought a home in the Hamptons for $1.36 million that was originally listed at $1.825 million, The New York Times reported. The report stated that “four of the last five quarters showed a year over year decline in median sales price.”
The Times reported the number of single-family homes up for sale in early 2019 was doubled from a year earlier while the number of homes sold decreased this year to 287 from 350 a year prior.
Jonathan J. Miller, the author of the Douglas Elliman report, said one of the reasons buyers were choosing not to buy in the Hamptons was due to the federal tax code Congress approved in 2017.
The state and local tax deductions (SALT) allow taxpayers to deduct the property and income taxes they pay from their federal returns. President Trump’s tax law put a lid on SALT deductions. The cap allows homeowners to deduct only up to $10,000 from state individual income or sales taxes and property taxes from their federal income taxes. The new tax code, passed by Congress in 2017, made it “more expensive for homeowners to own luxury property,” the Times noted.
“The Hamptons are trending much like the New York City metro area,” Miller said, saying the same situation was occurring in other states with high property taxes including California.
Houses that cost the most were harder to sell, Laura Brady, the founder of Concierge Auctions, wrote in the firm’s Luxury Homes Index report. Homes that cost an average of $24,079,286 sat on the market for more than 700 days.
Richard Ellis, the owner of Ellis Sotheby’s International Realty, told Business Insider some buyers are looking to the Catskills and the Hudson Valley area for a second home. The prices were said to be more affordable but still have a close location to Manhattan.
A report from Brown Harris Stevens noted homes that were listed between $500,000 and $1 million made up 34 percent of sales in the first quarter.
Fox Business’ Julia Limitone contributed to this report.