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Real estate is booming almost everywhere amid the pandemic, but the gains in local housing markets are far from equal. Two wealthy New York City satellites, the Hamptons and Greenwich, Conn., are quickly outpacing their neighbors in sales volume — a development that isn’t as predictable as you might think.
“Since the pandemic lockdown ended, both markets have been on a tear, seeing record sales levels and price growth,” said Jonathan Miller, of Miller Samuel, the appraisal company.
In the first quarter of 2021, the number of property sales over $5 million in Greenwich increased 400 percent year over year, from five to 25; sales between $1 million and $5 million were up about 90 percent. In the Hamptons, the corresponding segments were up 24 percent and nearly 83 percent over a year.
Sales below $1 million were up, too — 73 percent in Greenwich and nearly 30 percent in the Hamptons. This week’s chart lays out the data, provided by Mr. Miller and Douglas Elliman.
This is all new. Sales had suffered in both areas after the 2008 housing bubble, and were further slowed by the Trump tax reforms, which capped the deductibility of state and local real estate taxes, driving up the annual cost of these highly taxed homes.
These are wealthy areas, but they’re different markets — Greenwich is mostly primary homes, the Hamptons mostly second homes. So what’s driving the parallel booms? Cash.
“This pattern of sales is based on cash more than financial engineering,” said Mr. Miller, noting that underwriting on loans is 20 percent tighter than the historical norm, even with low interest rates.
Those in higher salary positions have suffered much less from unemployment during the pandemic. The economy is robust, the stock market is thriving, and people want to move. Those with means are simply freer to do so. “There has been an unprecedented amount of recalibration of how people think about housing and where they can live because of the flexibility of remote working,” Mr. Miller said.
As the pandemic recedes, though, migration patterns are likely to shift again, and may take the market with them. Steep price increases — up about 31 percent over a year in both Greenwich and the Hamptons in the first quarter of 2021 — could make these homes harder to sell a couple of years down the road if demand fades.
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