“People were calling on a Wednesday and wanting move in by Friday. They’d sign the lease, wire the funds and be on their way,” says Gary DePersia, noted Corcoran broker who has specialized in Hamptons’ luxury real estate for over 25 years. “It started in mid-March when people realized there would be a shutdown. The calls haven’t stopped.”
While the vacation rental industry has taken a massive hit during the Covid-19 pandemic—Airbnb was recently forced to lay off 25 percent of its workforce—luxury rentals in the Hamptons have skyrocketed, with wealthy renters and homeowners looking to quarantine out of the city, close to the water. Of course, it’s a stark contrast to those without the same level of resources, who are forced to suffer in stifling apartment buildings as an onslaught of summer heat looms.
“Those who had summer rentals already booked from July were seeing if they could start on May 1 and some have been extending their leases into the fall,” says DePersia. “Those that already owned a home moved earlier. People renting for the whole season are more this year than any since 2007.”
While the pandemic was the catalyst, DePersia cites the school shutdown, non-availability of summer camps and remote working as the specific issues fueling the fire. All that demand is driving up prices. “Spring rents have doubled from what they were in previous years. If something was renting for $15,000 a month, it’s getting $30,000 now. I know of a couple of rentals that went for $400,000 for two months,” he says. “Overall, it’s up about 30 percent.”
Cavett’s Cove Montauk Corcoran
Dylan Eckardt, a former pro surfer turned top-selling agent with Nest Seekers International, concurs with DePersia. “I got a call from someone in February saying ‘I just left the city. I have $3 million worth of my cars in tow behind me. I want an oceanfront compound, nobody around. Professionally cleaned. Budget is no option. For the rest of the year.’”
The frenzied rental market has spilled over into the sales market too. “One of the offshoots has people thinking it’s time to buy,” DePersia says. “Why spend money on rent when they can own? It’s been a wake-up call. If anything like this happens again, people will want a place they can go to.”
It’s a sentiment potential buyers are relaying to agents across the Hamptons. “I’ve put 14 houses into contract over the last 65 days,” says Eckardt. “People want their own retreat, their own safe haven. A lot more people are moving here full time. When they rent, they are looking for options to eventually buy. People are getting rent-to-buy houses.”
Despite the all of the bustling activity, DePersia stresses that the market is not saturated. “There are still a fair amount of rentals and sales available,” he says. “It’s not depleted and people shouldn’t be intimidated by the hype.”
The early influx of renters has not been without issues, particularly where social distancing is concerned. Treating an escape to the Hamptons as a reason to party and let loose has rubbed many of the locals the wrong way. “It has definitely caused a lot of drama,” says Eckardt. “People don’t realize social distancing means staying off the beaches. Locals are scared that the virus was brought out East. This disconnect about the virus has definitely separated the locals from the seasonal renters.”
Cavett’s Cove Montauk Corcoran
Peggy Zabakolas, also with Nest Seekers and a former participant on the Bravo TV show “Million Dollar Listing,” is giving the phenomenon a positive spin. “Typically renters are interested in specific hamlets, however, now they are more open to different areas, even a bit more west like in Hampton Bays and West Hampton,” she says. “Their biggest concerns are strong WiFi and outdoor space, because the majority of them will be working from home.” She adds, “The influx of summer residents always brings an added stress to year-round residents. However, with more people comes more revenue. Restaurants and bars are still closed with take-out being the only available option, so residents aren’t necessarily feeling the early arrival of summer renters just yet but landlords are definitely happy with the additional income.”
The additional income has not come without concerns for landlords, though. New York state’s moratorium on evictions also applies to the Hampton’s and a worst-case scenario, as illustrated recently by The New York Times, has property owners worrying their tenants may refuse to move out when their lease expires and they will be powerless to evict during the peak season, potentially losing hundreds of thousands of dollars in rental revenue. But as demand is so high, most landlords are simply overlooking these concerns.
With no discernible pandemic end in sight, Americans are continuing to shelter in place. However, for the financially fortunate few, the need for shelter has beget a race for luxury beachfront digs. And, despite a volatile and eroded economy, it seems price continues to be of no object.
Source: Vacation Home - robbreport.com
