The End of Real Estate as We Know It?

Brokers talk prices, tastes, rental landscape
This is not a good time to sell your house, a panel of top Hamptons real estate brokers agreed last week. From left, Jim Oxnam, the moderator, John Gicking, Diane Saatchi, and Peter Turino. Irene Silverman

Judging by the East Hampton Library’s standing-room-only turnout last Thursday to hear three veteran brokers talk about Hamptons real estate, either a lot of people are preparing to attend a lot of dinner parties, knowing the topic will be second only to politics, or they are thinking of putting their houses on the market.

From what the experts had to say, though, this does not sound like a good time to sell. “We’re entering the third year of a slow cycle,” Peter Turino, the president of Brown Harris Stevens in the Hamptons, told the crowd. A typical cycle, he explained, is three years in duration, so “we should pull out next summer.” For the time being, though, “there’s a shortage of buyers and a lot of overpricing. Prices must come down.”

“It’s a soft market,” agreed Diane Saatchi, who heads her own team at Saunders Associates. “Buyers don’t want to feel they’re overpaying.” Sometimes, she said, agents need to “remind them that they’ll forget it when they have their first barbecue at the house, or their daughter gets married on the lawn.”

John Gicking, senior managing director of Compass, was a little more optimistic. “Buyers are starting to tiptoe back,” he said. “I’m seeing more offers now than I’ve seen in the past year. I hope it’s the beginning of a turnaround.”

The moderator, Jim Oxnam of Brown Harris, asked the panel how long the average house is taking to sell. “The average time is 29 months,” Ms. Saatchi answered, eliciting disbelieving gasps in the audience. “We all have career-long listings!” she continued, straight-faced. “I know of some listings 15 years on the market. If someone says, ‘I’m thinking of selling, but I’m not in a rush,’ I say, ‘Come back to me when you’re in a rush.’ ”

But, she added quickly, “If it’s priced right, it will sell.”

“A well-priced house in Springs — well under a million — can find a buyer in a month,” Mr. Gicking observed.

“What’s the best time to sell?” Mr. Oxnam asked.

“When you’re no longer loving or needing the house, it’s time to sell,” Ms. Saatchi replied. “If you want to sell faster, lower the price.” (All three brokers repeated that advice whenever they could, which may explain why so many real estate ads trumpet “PRICE SLASH.”)

Even in a slow market, there must be demand somewhere? “Sag Harbor is probably the most charming village, and values have soared,” Mr. Turino said. “And Amagansett’s proximity to the beach has finally been recognized — a house there worth $500,000 in the mid-’80s is now worth $3 million.”

“One of my agents said there’s been huge success in towns named after Indian tribes — Amagansett, Montauk, Sagaponack,” said Mr. Gicking. “No, really,” he said, smiling as laughter erupted.

And what about East Hampton, which had not been mentioned and is rumored to be less in demand than in years past.

“I liken East Hampton to the Upper East Side,” said Ms. Saatchi. “Young people won’t look above 57th Street.” She, too, said the places “in vogue” are Amagansett and Sag Harbor, and Montauk as well.

“What are buyers looking for?” Mr. Oxnam wondered. The one-word answer, as anyone who has recently driven the lanes of Amagansett or the back roads of Bridgehampton has already surmised, is “new.”

“The exception to the demand for new houses would be a traditional house in great condition. It’s the amount of work needed on it” that is the deciding factor, said Mr. Gicking. “City people don’t want to spend time talking about where the electrical outlets should be.”

He himself, Mr. Turino confessed, likes “early 20th-century masterpieces.” But, he said, “many young buyers are not nostalgic, and not attracted to this in the least. On Lee Avenue and Crossways [in East Hampton Village], there’s one of the most interesting properties I’ve ever seen — 3.3 acres, built 1898, twin gambrels, living room looks like the Algonquin Hotel, 10,000 square feet, 10 bedrooms, $18.75 million. Needs total renovation.”

“They want high ceilings, 9-to-10-foot-high basements, an open kitchen and living room, no formal dining room, lighter, brighter spaces,” Ms. Saatchi said. “It’s very hard to incorporate all that, even in a 10-year-old house . . . the trend is teardown.”

“Modern is back in vogue,” she added. “White window trim has suddenly become black, have you noticed?”

All agreed that modern architecture is having a huge resurgence here. “In the ‘50s and ’60s, many fine midcentury modern houses were built on spectacular sites. Land was very cheap then,” Ms. Saatchi noted. “And unfortunately, they’ve been torn down.” She advised homebuyers to “find a location that’s out of favor but has beautiful landscaping.”

The internet makes house hunting easier, Mr. Gicking said, but it has its pitfalls. From a broker’s standpoint, a big one is that “a lot of people will call one broker and go see one house; then they’ll call another and see another. This is very inefficient. I try to convince buyers to choose one broker, rather than work piecemeal.”

“Technology, in our business, is a dark hole,” Ms. Saatchi remarked later on.

Up to then the conversation had been all about buying and selling, but mention of the internet opened up the dark hole — renting.

“The rental business has changed, and so have people at both ends,” Ms. Saatchi told the crowd. “Twenty-five years ago, if you didn’t have a three-month rental for your house by Presidents Day, you were devastated. And renters, too, because they didn’t have access to see properties. All they had were those little black-and-white ads in The Times. Now they are empowered. And in the midst of this, Airbnb, Home Away, etc., make it possible for tenants to go directly to owners. Now, young people pick a house on a Wednesday, jump in a Zipcar, come for the weekend. Maybe they’ll take that, maybe another. Impulse. Will they come back and be buyers in 10 years? I don’t know.”

All those new alternatives have come about not just because of the internet but also because “we don’t have hotels and motels,” she added. “The real change is that we’ve become a short-term destination. We never were before.”

“I think they are filling a void that we don’t do,” said Mr. Gicking, of the online rental agencies. “We still have our core-client high-end rentals.”

As the evening drew to a close, someone in the audience posed a last question: “Will the pace of the last 20 or 30 years continue?

“I would be surprised if it continues,” Ms. Saatchi said.

“I think we’ve experienced a really incredible period,” Mr. Turino agreed.