C.P.F. Revenues Down, but Not in East Hampton
The real estate market in the Hamptons is down so far this year, and so are revenues for the Peconic Bay Regional Community Preservation Fund, but East Hampton Town is bucking the trend.
Revenues from the fund, a 2-percent real estate transfer tax that is distributed among the five eastern townships, are down 5.7 percent through July, compared to the same period last year, to $54.85 million. According to Assemblyman Fred W. Thiele Jr., who authored the C.P.F. legislation and released the figures on Tuesday, the fund had taken in $58.19 million by the end of July 2015.
East Hampton is the only town on the East End in which receipts are up by more than 1 percent. In fact, they are up 9.5 percent, from $17.23 million in the first part of 2015 to $18.87 million so far this year. The only other town to see an increase is Southold, where the figure is a modest .9 percent, from $3.19 million to $3.22 million.
Why is East Hampton racking up money, while others are falling behind? “The increase in the C.P.F. funds is entirely encapsulated in a few very large sales that occurred this year in East Hampton Village,” said Andrew Saunders, president of Saunders & Associates. In fact, transactions are up $65 million in the village, with $250.2 million worth of residential housing sold so far this year, he said.
The three top sales include $180 million on Lily Pond Lane alone, where in February, Scott Bommer, a hedge fund manager, sold 6.4 acres of oceanfront property for $110 million. The Compass agency, which brokered the sale, said at the time that it was the second largest in New York State history and the fifth largest residential sale in the United States. It involved three parcels: 2.82 acres at 93 Lily Pond Lane for $22 million; 97 Lily Pond Lane, a vacant 1.4-acre parcel, for $24 million; and two acres at 101 Lily Pond Lane for $63.8 million.
David Geffen, the music and film executive, bought a two-acre property at 199 Lily Pond Lane for $70 million in March from the estate of the late fashion executive Josephine Chaus, and sold several properties on West End Road, formerly owned by Courtney Ross and subdivided into four lots, for a combined $50 million in June.
Mr. Saunders said that when “these great, very rarified, special properties come on the market in the Hamptons, especially waterfront, there always seems to be a buyer poised.”
While significant deals in the Village of East Hampton are boosting C.P.F. income, the rest of the East Hampton market remains hot as well. Mr. Saunders said sales outside the village totaled $242.9 million so far this year. At this point in 2015, $243.3 million worth of real estate had been sold.
“Each hamlet has its moment,” Mr. Saunders said, and while there are trophy properties elsewhere on the South Fork, affluent buyers seem to gravitate to East Hampton Town more than anywhere else.
Southampton Town’s C.P.F. revenue is down 13.3 percent, from $34.73 million to $30.12 million. Shelter Island Town showed the biggest decrease, 20 percent, while Riverhead Town’s C.P.F. income is down 7.9 percent.
Overall C.P.F. revenue for July totaled $8.69 million; it was more then $9.91 million in July 2015. In fact, Mr. Thiele said, July was the fifth consecutive month that intake was less than the same month in 2015, with a 16.1-percent decline over all during the five months.
This year’s income from the transfer tax is expected to exceed $90 million, as opposed to $100.29 million in 2015 and $107.69 million in 2014. Those two years brought in the highest annual totals in the history of the C.P.F., which since its inception in 1999 has generated $1.149 billion.
Mr. Saunders said that for 2016 to be lagging behind isn’t too worrisome yet. “It’s not terrible, in my view, but, again, the lion’s share of the business happens July through October.”
The Hamptons market is down despite record low interest rates and a bull market. Mr. Saunders said hedge funds have not had a good year, and that an acrimonious election may be casting a pall.