As more New Yorkers travel abroad, the demand for the Hamptons rentals begins to sink

The Hamptons landlords have to offer last-minute discounts to attract tenants. For the first time in two years, the supply of summer rentals in the Hamptons exceeds the demand from potential renters.   

The median rental price fell 26 percent in the first quarter of this year, according to Miller Samuel CEO Jonathan Miller. The drop in demand is linked to the renewed opportunity to travel outside of the United States as more countries lift COVID-related restrictions. 

“People feel safe to travel and are going to Europe and other places while they couldn't or were not comfortable traveling earlier in the pandemic,” said Anya Levitov, the managing partner at Verus Real Estate. “As travel restrictions ease, people are less likely to stay in the Hamptons for the entire summer and will shorten their stay to weeks rather than months.”

Just over a month ago, the Hamptons beachside mansions were listed for over $1 million a month. Homeowners were testing the market and keeping the same prices as last year when the Hamptons bookings from Memorial Day to Labor Day reached $117 million, according to The Real Deal. Now, some owners have to cut the asking rents by 30 percent to avoid vacant properties, CNBC reports.

“There is a tremendous amount of inventory and people are not renting it,” Enzo Morabito of Douglas Elliman told CNBC. “And it’s across all segments, from the very low to the very top of the market.”

The slowdown in the Hamptons rental market could also be tied to the high number of home sales. Many vacationers who preferred to spend their time in the Hamptons and would rent homes there ended up buying them in 2020 and 2021. The median sales price has been staying above the pre-pandemic levels and reached over $1.4 million in Q1 of 2022, according to the Miller Samuel report. 

“The buyers removed themselves from the rental market,” said Morabito in an interview with CNBC. “Now, all of the sudden the people who bought want to rent it and the renters aren’t there. So you have this huge surplus.”

Resources:

“The Hamptons summer rental market is facing an unexpected chill as inventory piles up and prices come down,” by Robert Frank (CNBC, 2022)

“Hamptons rental market slumps. Yes, slumps,” by TRD Staff (The Real Deal, 2022)

“Hamptons rental market had strong summer, begins to cool,” by Sasha Jones (The Real Deal, 2021)

“Your sun-filled beach getaway is going to cost more this summer,” by Daniela Sirtori-Cortina and Bloomberg (Fortune, 2021)

“Elliman Report: Hamptons Sales 1Q 2022,” (Miller Samuel Inc., 2022)