The luxury real estate market in the Hamptons has one big problem: successful young professionals are not interested. The Hamptons is filled with lavish, spacious plots of land with large mansions, swimming pools, gardens and tennis courts, which young people are increasingly deciding not to spend their time and money maintaining. Instead, they are purchasing smaller homes with less upkeep and have increased spending on experiences, a major shift from the behavior of buyers and sellers in the 1990s and early 2000s.
In our last Hampton’s blog we saw how the real estate market is rebounding from buyers purchasing multimillion dollar homes and renovating them into their dream properties. However, young individuals with high paying salaries are uninterested in expending so much effort in a holiday home. Unfortunately for the Hampton’s real estate market, it means houses are listed for longer periods of time, even when the offer price is cut down in the millions. In 2016, Brown Harris Stevens reported that house prices decreased by 23.1 percent from the previous year. However, developers continued to invest in projects as the amount of housing increased by 21 percent.
Many professionals in luxury real estate pinned the downturn of the Hampton’s real estate market to the U.S. election and an overall drop in profits and bonuses on Wall Street. Commentators argue that this led to a decrease in people purchasing holiday homes as buyers and sellers feel “uncertain about what their economic future will look like”. Indeed, with each new administration, some economic fluctuation is inevitable.
So where are these young professionals going if not the Hamptons? The Hudson Valley has become increasingly popular for its beautiful scenery, quiet small towns, and easy access from the City. While the Hampton’s saw a downturn in 2016, Hudson Valley’s real estate “remained steady”. Statistics show that in the summer of 2016, millennials travelled 55 percent more to the Hudson Valley and the Catskills and 46 percent less to the Hamptons than they did in 2012. The Hudson Valley offers ample opportunity for those looking to spend money on experiences, from hiking, mountain biking and kayaking to historic attractions, farms and vineyards open to the public. The Hamptons will always be a destination for New Yorkers, younger generations are slowly changing the market as they seek a different kind of adventure.