2022 was quite a ride for East End Real Estate Markets. In fact, the past 2+ years felt like a poorly engineered roller coaster. The Real Estate Report dated 12/30/22 reported 29 sales for the last week of the year, of which 6 were vacant lots and 3 were commercial properties. The report posted $62,747,490 as the total dollar amount recorded.
To most people, this may not mean much, but for this self-proclaimed numbers junkie it was stinging. Any agent will admit ‘business is down’ but this validates by just how much. A ‘typical’ week — if I may be so bold to use the word ‘typical’ — has approximately 100 transfers and $200M+/-. So, you see where I’m going with this. The first half of 2022 was the eclipse of the covid wave, as I call it.
Here’s some examples to chew on…
The week ending 1/28/22 there were 99 closings posting a total dollar amount of a staggering $478,458,050. Yes, nearly half a billion dollars in one week. The average sale price was a record $4,832,910. Of course, I had to dig deeper to see why/how, and it just so happened that 153 Lily Pond Lane in East Hampton Village sold for $84,500,000. In fact, East Hampton Village saw $130,500,000 change hands. That same week 840 Meadow Lane in Southampton Village recorded it closed at $70M and 70C Cobb in Water Mill at $60M along with 70B Cobb at $56.5M.
That was an incredible week for East End real estate transfers.
On the high end, the number of recorded title transfers the week ending 3/25/22 were 192 with $430,624,382 changing hands — not records but certainly demonstrates where we were then and where we are now.
2021 weekly reports were some of the most impressive I’ve seen, but for purposes of this year-to-year comparison let’s stay focused on just that.
Redfin reported a 38.1% drop in luxury home sales year-over-year September-November. They define ‘luxury home sales’ as the top 5% of market value nationwide. They said it was the greatest decline in its 10 years of tracking the market — to me this is because they weren’t monitoring the market in 2008-2009 when Bear Sterns & Lehman Brothers fell. That market was more severe for the East End due to the demographic of our buyers and the amount of debt fueling the lead in the market.
Although the number of sales and Total Home Sales Volume declined this year, the S&P Core Logic Case Schiller Report Index recorded a 9.9% year-over-year growth in home prices. Redfin reports a similar 10% increase in home prices.
The Real Deal, a trade publication, reported Nassau County had the greatest annual drop in luxury home sales — down -65.6%. On the other end of the report, Miami had the greatest jump at 28.1%. Florida was the darling for 2022.
The National Association of Realtors Index of pending home sales (fully executed contracts) was near a record low in November — down -37.8% — the 6th consecutive month of recorded declines.
Now, I don’t want to be ‘chicken little,’ the sky is NOT falling, this is just another market cycle. Albeit a very different one than the past 2+ years.
How long and how deep this housing recession will be on our country is determined by several factors — some within our control and others not so much. The factors in our control lie in the hands of our government leaders, Mr. Powell for instance — hopefully the Fed won’t overshoot this one and kill the goose that lays the golden egg (home sales create jobs and inject money throughout the economy).
Thankfully nothing lasts forever. Not good markets, not bad markets. Long term I’d always rather keep my money in East End Dirt than anywhere else. In fact, 2023 will be a great year to go shopping. And I’m not talking about shoes, but for our quality EED — East End Dirt — and it’s all quality!