Northfork Properties

About A Year Later, The Hamptons Real Estate Market Is Still Slumping

Posted on Thursday August 8, 2019 1:37 AM
by Joseph Kazickas No Comments »

The Hamptons real estate market continues to deflate with non stop price reductions ranging, at a clip, from 10% to 25%. Market data has been widely publicized. Here are links to the Miller Samuel and Judi Desiderio’s market reports for first half 2019. It’s grim. Especially at the market’s higher end.

There are a number of reasons for the current situation, ranging from over speculative building, the emergence of two wage earner families, changes in tax law, and the dependence upon rental income to defray the cost of leveraged ownership.

At the markets highest end the inventory bulge is ominous and at current absorption rates will require over three years to digest, despite significant price reductions. New construction is especially under pressure.

Changes in the way we work and live has had a profound effect on the Hamptons rental market. I well remember meeting the Long Island Rail Road’s CanonBall Express, in East Hampton, with countless other kids, to welcome Dad out for the weekend. Moms and children luxuriated in the summer rental. No longer. The advent of the two wage earner family compromised this picture, resulting in shorter term rentals.

Losing the longstanding federal tax deduction of state and local taxes, combined with limitations on mortgage interest deductibility, have also had a significant impact upon the economics of second home ownership. The loss of these deductions has had an inordinate impact upon high tax states such as ours, and easily tips the balance between a sensible investment in real estate, to one that doesn’t appear so. Especially as values weaken.

It’s hard to find a reason for suggesting the Hamptons real estate market will recover anytime soon. But there is a silver lining to every cloud…especially if you are in the market to buy.

The Evaporating Value of Real Estate in the Hamptons

Posted on Monday September 17, 2018 3:14 AM
by Joseph Kazickas No Comments »

It’s clear, though few speak of it, while everyone in the trade is slowly facing up to it, that the value of real estate in the Hamptons has been evaporating over the last year and a half.
The clearest evidence of this value erosion is found in the growing number of listed properties that have reduced their asking prices.
Reduced 6

Reduced 5

Reduced 3

reduced 4 Reducing an asking price, which in isolation doesn’t serve as a market barometer, speaks to an underlying current in the real estate market when it begins to occur broadly. The scale at which price reductions are occurring in the Hamptons is sending a clear message that the real estate market is undergoing a wholesale repricing. A repricing that is likely measured in the 100’s of millions of dollars to date, and that shows no signs of abating for the foreseeable future.
It may well be that some properties came to market at aspirational prices, and that hard market realities are forcing sellers to reprice but the fundamental reasons for this are oversupply and chilled demand. Spec construction in the luxury category has contributed to a glut of properties in the 5 to 10 million dollar price point. It’s even worse in the super luxury market where some speculatively built properties have been lingering on the market for years. Price reductions, however, are occurring across all price points, and not just for houses built on spec.
In the first two weeks of September, by my rough calculation based upon email notices sent to us by listing brokers, a minimum of 40 properties have seen price reductions totaling over $35 million which range from $15,000 to $13,500,000.
It’s clearly a buyer’s market. For sellers, tighten your seatbelts. A rough road lies ahead. For buyers, greater value is in your future, but don’t wait too long to move on a purchase.

The Hamptons Real Estate Industry Abandons RealNet With A View To Saving Money

Posted on Saturday December 3, 2016 7:34 PM
by Joseph Kazickas Comments Off - Once King of the Jungle – Once King of the Jungle

What many real estate brokers had secretly hoped for, is now happening. In an effort spearheaded by the 5 largest real estate brokerages in the Hamptons, a new data management system is being rolled out, finally breaking the industry free from the grip, and outrageous expense, of the incumbent platform known as RealNet.

The packaging of the cloud based RealNet data management platform and its listing sharing capability among broker participants, coupled to its leading online advertising platform known as (Screen shot above) soon dominated the data management segment of the industry. Eventually enrolling 99% of the industry’s brokers and agents, the platform enriched its developers over the last 15 years

Unlike other real estate markets that have adopted MLS (Multiple Listing Service) the Hamptons has long resisted a move in that direction because of a rule common to all MLS participants which allows Brokers to advertise one another’s exclusive listings. Without that ability, in this internet driven world, it becomes much more difficult to crack the Hamptons real estate market. The industry was willing to pay the high cost of subscription to the RealNet platform (annual per office licensing and user fees of as much as $17,000, and $1,500 respectively, plus an fee of $20,000) because the cheaper alternative (MLS at about $600/year all in) would lower a huge barrier to entry which could ultimately dilute commissions.

The agencies behind the new East End Real Estate Association have solved the riddle of keeping the market (at least a little bit) closed by customizing an alternate data management platform to meet the needs of the Hamptons market, and offering it for a one time, not so inexpensive, but one time membership fee plus an annual user fee which promises enormous long term savings to those who choose to participate. Which it seems everyone is doing.

The new platform which is known as the East End Listing Exchange is pretty rudimentary when compared to the RealNet system which it is replacing. Beyond the expense of RealNet, there were frequent complaints about the lack of response from the company to questions raised, or suggestions made for improvements, by users. Additionally the lack of transparency in the pricing of RealNet, and a licensing agreement that prohibited any disclosure as to fees charged, at the risk of license termination, freed the developers to charge whatever they felt.

The developers of RealNet/ claim to have been ambushed. I guess they could see it that way. Maybe it was complacency, the comfort you feel when your customers just hand over the money year after year. But what’s really happened is that the stale website, which has not had a redesign in years, was falling further and further behind in relevance as alternate websites such as Zillow and Trulia moved into the space. In the end, the platform became way too expensive for the needs of the industry.

2016 – A Hamptons Rental Season That Disappointed Many – Especially The Middle Men

Posted on Friday October 21, 2016 10:21 PM
by Joseph Kazickas Comments Off

A traditional home for rent in East Hampton

A traditional home for rent in East Hampton

All reports, meaning conversations with our friends and colleagues in the local Hamptons real estate profession, suggest that the 2016 rental season on the East End was a bust – at least for brokers.
Talk is that the rental business among brokers plummeted by as much as 40% from the previous year, which was already down from 2014.
Few have blamed the new East Hampton Town Rental Registry Law. More often brokers speak of the changing profile of the rental market, one that has trended toward shorter term commitments rather than the season long ones of the past. And of course, a new generation of websites has exploded onto the internet to address and profit from the rental market as well. These sites are designed to connect landlords and tenants with a seamless transaction process, eliminating the need for a real estate agent, but, ironically, not always delivering a benefit to either party.
It’s not easy to understand, much less explain, but we’ve seen listings on direct to owner websites priced at a discount to the broker’s listed price. Why leave the money on the table? Price them both at par.
So while real estate brokers complain about the bad rental market, we’re not so sure the same holds true for landlords. In fact, for many it was a successful year, securing quality tenants through either a real estate broker, or through an online listing service. However we also suspect that many landlords have engaged in illegal rental activity, specifically short term or multiple short term rentals in communities where limits exist on both.
As the 2017 rental season approaches it will be interesting to see how things start, and then evolve, especially for the real estate brokerage community.

Desperate Times in the Hamptons – Real Estate Agents Push Rentals

Posted on Monday May 23, 2016 2:23 AM
by Joseph Kazickas Comments Off

For the moment, at least, the mood among players in the Hamptons real estate market has turned negative. Brokers have been openly avowing a slow down in the market place and the data confirms it. Sales on the East End of Long Island are down year over year.
But another interesting thing is happening, observable in the mass email communications sent from agency to agency. Emails captioned “Rental Update”, “Courtesy Rental”, “Rental Open House” have increased exponentially over the last year.
For 2016 more real estate agents are circulating and sharing more rental market related data than ever before. This is happening because real estate agents who had neglected the rental market in the past are being forced to turn to it out of either desperation, or common sense, to generate income.
While the resale market contracts, the rental market offers some money making possibilities and a possible path to more lucrative business.

The Death of Cyril’s Fish House – The Hamptons Loses A Legend

Posted on Monday May 16, 2016 9:14 PM
by Joseph Kazickas Comments Off

An era has come to an end and we are the sad witnesses. Cyril’s Fish House, arguably the most successful seasonal restaurant and bar in the history of the Hamptons will not re-open this year. Or ever again.

This most popular gathering place for an after beach pick me up, delicious food, and a fabulous mix of people from all walks of life has fallen victim to it’s own success and excess. On Saturday afternoons, during the season, Cyril would cater to hundreds, if not thousands, of happy people. From billionaires to bikers, celebrities and commoners, everyone was welcome. The scene could get raucous but the mood at Cyrils was always reggae “love your brother and sister.”

And now it’s gone.

And a part of East Hampton is lost with it.


25 years ago Cyril Fitzsimons opened his Napeague bar/restaurant after having escaped an unclear history which, rumors suggest, dates to the Irish “Troubles”. Previously he had also enlisted, as an Irishman, into the United States Marine Corp., served in Viet Nam, and was wounded in battle. Like many Irishmen before him Cyril made his career in the hospitality business, where at different times he owned and operated bars in Spain and the Caribbean before eventually finding his namesake hospitality outpost on the Napeague Stretch, on the way to Montauk. Over the years he built an incomparable destination for outdoor fun, great food, good music, solid beverages, and happy, happy times.


There may be questions as to how the bar/restaurant grew to violate zoning codes. The back story is always grey. And no one is above the law. But the law came down hard, and now the place where so many local kids snagged a job as a waiter, server, host, hostess or BBC Girl, made a small summer job fortune, and profited from the wisdom of an Irish curmudgeon mentor, with a heart of gold, a warm water Caribbean karma, a wicked streak, and a softness for those in need, is lost forever.

Thank you Cyril. Thank you for your generosity. We are all so sad and will miss you and the wonderful times.

I can truly say that the Hamptons will never see the likes again.

It was a beautiful run, and shouldn’t have ended the way it did. Your meeting place was a huge asset to the spirit of East Hampton.



Catching up on the Hamptons Real Estate Market

Posted on Saturday February 6, 2016 8:36 PM
by Joseph Kazickas Comments Off

It has been several months since we lasted posted on our favorite blog, and a lot has happened on the East End.
After a glorious 2015 summer, fall and early winter the calendar has flipped us into 2016 and we start back at zero.
Shaking the market in 2016 is new entrant Compass. The “technology driven” real estate brokerage moved into the Hamptons in a big way, but not without hitting some bumps on the road. Compass has pillaged the East Hampton office of Sotheby’s pulling top agent Ed Petrie (among others) into its warm embrace, and Petrie returned the love in short order orchestrating the $110,000,000 (yes, you are reading it correctly) sale of the Lily Pond Lane oceanfront compound assembled only in 2014, at a cost of $94,000,000, by hedge funder Scott Bommer.

The $110,000,000 flip.

The $110,000,000 flip.

Compass’ aggressive staff and agent recruitment efforts have caused a nervous stir among the large incumbent agencies, if not outright legal action by both Brown Harris Stevens and Saunders Associates alleging breach of contract and theft of data.
Another development whose impact may be significant is East Hampton Town’s new Rental Registry Law, opposition to which was vehement prior to being enacted mid January. The law makes it illegal for a landlord to advertise or rent out, and a tenant to rent, a property in East Hampton Town that has not been registered with the Town as a rental property. Applications for a rental registration number are being processed by the Town’s Building Department and cost $100 for a two year permit. While I’ve expressed support for a rental registry, many feel that the new law goes too far, criminalizing what could be innocent behavior with hefty fines, including possible jail time.
The biggest impact, however, has to do with the advertising restriction. Ads will require the RR# be displayed in order to comply with the law. This spells disconcerting news to everyone, but especially to real estate agencies who will be forced to drop unregistered properties from public display on the internet.
No doubt this will cause a general contraction in the volume of rentals this coming summer season, the economic impact on East Hampton Town as yet unpredictable. But probably not good


A Showdown Over The Proposed Rental Registry Law Looms In East Hampton Town

Posted on Sunday October 25, 2015 5:57 PM
by Joseph Kazickas Comments Off

East Hampton Town’s proposed Rental Registry Law is hanging over the local economy, homeowners who rent, tenants, and the real estate industry, with a showdown in the works among disparate interests.
The next public hearing is scheduled for November and rest assured that the people will speak. An already large constituency of rental home owners and real estate interests are organizing against the proposed rental registry.
Violation of the rules governing the registration and use of rental properties could result in fines measured in the tens of thousands, possibly imposed upon un-suspecting tenants as well as landlords. A proposed prohibition on advertising rental properties without displaying a registration number will likely empty a lot of websites.
The purpose of the Rental Registry, it would appear, is for the Town of East Hampton to get a better handle on what is rented to how many; to more easily pursue non-compliant landlords; and to have stronger teeth in cases that move toward prosecution. Not to mention, raising revenue for the Town.
Make no mistake, there exists disregard for the statutes on the books governing number of occupants, frequency of rentals and the selling of shares. Some of it is innocent, some not, and it’s pretty easy to be sympathetic to the neighbor who ends of next to a party house rental. However it is a matter of code enforcement, not more government intrusion.
A website,, has been set up to explain why (at least from one perspective) the law is a bad idea. You can register your opinion as well.

The Case Against Exclusive Rentals

Posted on Wednesday July 15, 2015 7:16 PM
by Joseph Kazickas Comments Off

An exclusive rental offering the renting agent a 5% commission...

An exclusive rental offering the renting agent a 5% commission…

...or an open listing offering the renting agent 10%. As a real estate agent which would you rather show?

…or an open listing offering the renting agent 10%. As a real estate agent which would you rather show?

In the last year or so we have seen a smattering of “exclusive rentals.” Exactly as the term implies, an exclusive rental is a rental property wherein the owner has designated a real estate agent to act as his exclusive representative in any negotiations surrounding a possible rental transaction. In essence, a real estate agent with a potential rental customer must now work through the exclusive agent rather than deal with the owner directly, as is more commonly the case.
In addition the prevailing 10% rental commission is now to be shared between the exclusive listing agent and the renting agent. Usually there is a pretty generous split of as much as 90% to the renting agent, but oftentimes the split is 50/50.
Giving a real estate agent the exclusive right to rent one’s property may not be such a good idea. Here’s why.
In a market such as the Hamptons, which suffers from an oversupply of rental properties, dis-incentivizing real estate agents because the commission is shared creates a real reason for not showing a property. But even if a landlord offers the renting agent a full 10% there is another reason why an agent might decide not to show an exclusive rental, and that is surrendering the name and contact information of his customer to the exclusive listor. Who would want to do that?
Not all real estate agents in our market will work with rental customers. Those who don’t have real estate businesses which are likely mature and they derive most of their leads by way of referral.
The vast body of real estate agents, however, understands that even though rental commissions are small compared to commissions earned in the resale market, the rental business can serve as an incubator for future resale business. In short rentals often lead to sales.
Of course, there might be circumstances where a homeowner feels more comfortable with a single point of contact, either because of the uniqueness of the property or because they just don’t want to deal with unknown real estate agents. We hear of agents who have been instructed by their broker/managers to actively solicit rental exclusives and they will pitch the benefits of an exclusive, without ever mentioning why it may not be in the best interest of the owner.
Success in bringing about real estate transactions lies in aligning the interests of all stakeholders. An exclusive rental tends to corrupt the process.

Hamptons Rentals – Market Recap

Posted on Wednesday June 10, 2015 8:45 PM
by Joseph Kazickas Comments Off

Cove Road

As we move through June and rental enquiries begin to ebb we can pretty much come to the same conclusions about the Hamptons rental market as we usually do this time of year: we are in a market which is chronically over-supplied, relative to demand. For our part our rental volume has increased year over year following what was universally regarded as a dismal 2014.
So it is pretty hard to characterize the market as strong or weak. As an owner if you were successful in finding a tenant it was a great rental season. If your house, which always has rented by February, still lacks a tenant then it’s a bad rental year.
But here’s a hard fact…there is still a lot of inventory available, including this interesting situation in Sag Harbor pictured (above),
Read More