That’s a telling example of what is happening across the East End: a meteoric rise in sale prices that many brokers say is driven by big Hamptons trophy-home sales, but a glut of homes valued under $10 million sitting on the market, including some new ones built by speculators. The numbers were recently published by Suffolk Research Services, a firm that tracks East End real estate transactions.
In the town of Southampton, which in addition to Sagaponack encompasses wealthy areas like Bridgehampton and Southampton village, the median price rose 21 percent, to $995,000. The number of homes sold, however, dipped 36 percent, to 944. Farther east, in the town of East Hampton, the median price has risen 20 percent so far this year, to $1.1 million, but home sales are down 28 percent, to 467.
Among the nearly 30 homes sold for $10 million or more this year, Suffolk Research reports, most are in Southampton; three there sold for more than $30 million. Three other sales, ranging from $10 million to $18 million, occurred in Sagaponack.
Sagaponack has experienced an “extraordinary appreciation, even in just the last two years,” said Judi Desiderio, a real estate broker and an owner of Town and Country Real Estate in East Hampton village. “It’s the same in Southampton village near the beach,” she added. “But clear across Southampton and East Hampton towns, the general trend is less sales.”
That can make for lower prices in some places, as sellers slowly stop “reaching for what was,” as Ms. Desiderio put it, and realize that buyers have lots of inventory to peruse. “A buyer today comes out and looks at dozens of properties,” she said. “They’ll know instantly if a house is priced at last year’s or today’s prices.”
Areas where the zoning ordinances allow smaller, half-acre, lots, like Noyac, Springs and Hampton Bays, have traditionally had less expensive prices, she added. More generally, when homes are priced “below $1 million anywhere, that represents a discount already and you can probably negotiate beyond that.”
Paul Brennan, a broker who manages the Southampton offices of Prudential Douglas Elliman, said $5 million was the cutoff below which “every town has bargains now.”
E-mail messages are regularly flying out to East End brokers, announcing new pricing. “I see it every day on the computer,” Mr. Brennan said. “More and more houses that come from brokers saying, ‘Price reduction, price reduction, price reduction.’ ”
To the west, the trend is somewhat different: a decline in both the median price and the number of sales. In Westhampton Beach, for example, the median price fell 7 percent, to $601,700, and unit sales decreased by 50 percent, to 51, Suffolk Research Service reports. But those areas don’t typically have the trophy-home sales that have propped up easterly prices, according to Lawrence Porter, a broker with Brown Harris Stevens’s Westhampton Beach office.
There and in neighboring Quogue, Mr. Porter said, “volume is way off.” But he added that demand for properties near the water was still healthy. According to county records, for example, 3.5 acres on Dune Road in Quogue sold for $15.75 million in May.
Perhaps inevitably, fallout from the weakening market is starting to affect speculative builders.
“Speculative financing is the riskiest type of lending out there,” said David De Vito, a senior vice president who oversees both commercial and residential lending at Suffolk County National Bank, based in Riverhead.
Applications for financing to build have declined by 10 to 20 percent, Mr. De Vito estimated, “as builders try to sell existing inventory.”
UP on the North Fork, where prices are less shocking in general, the median in the town of Southold rose by a modest 5.5 percent, to $527,500. The number of sales, meanwhile, dropped 32 percent, to 275, according to Suffolk Research Service; brokers report high inventories.
Even though transaction amounts are more limited, however, trends are similar to those on the South Fork: higher medians, fewer sales.
Homes valued under $1 million, and not on the water or near a creek or bay, are the ones lingering the longest, according to Enzo Morabito, a broker with Prudential Douglas Elliman.
Tighter lending restrictions are also taking a toll, he added, further limiting the number of buyers. “It’s much tougher than it was” to get a mortgage, Mr. Morabito said. “Everything’s putting a clamp on the inventory; it’s sitting there much longer.”
There was a similarly modest pattern in Montauk, on the very end of the South Fork, where the median price has risen 5 percent, to $860,000, and unit sales are down 32 percent, to 67.
Recent high-end sales in oceanfront areas like the Montauk moorlands have “pushed up the ceiling” on prices, said Krae Van Sickle of Corcoran’s Montauk office. But lower-end asking prices have risen to a point beyond what the market will bear. “You can get more land and more house in Springs now for $600,000 than you can in Montauk,” he said. He expects prices to flatten in the lower and middle range, he said.
“It’s a little quiet,” Mr. Van Sickle said of the pace of sales. “I think people are taking a wait-and-see approach and being a bit more cautious.”