- Buyers have flocked to the Hamptons during the pandemic, driving up home prices in the vacation hotspot.
- The new owners are trying to make money by charging a ton for summer rentals – up to $1 million a month.
- But demand has waned and some landlords are cutting rents by up to 30%, CNBC reported.
Buyers have flocked to the Hamptons during the pandemic, sending home prices skyrocketing in the popular vacation spot.
To recoup their costs — and even make a profit — landlords have listed their tony mansions at astronomical rents over the past two summers. (Example: A beachfront mansion, bought for over $16 million last year, is now listed at $1.65 million for the month of July.)
But CNBC found that a glut of supply in the market after years of buying – and a drop in demand as summer travelers head abroad after two years of the pandemic – could mean that prices for the Hamptons will return to Earth this summer.
Some Hamptons landlords are cutting their rental prices by “30% or more” to find tenants for their properties, CNBC’s Robert Frank reported.
Douglas Elliman’s broker, Enzo Morabito, told CNBC that “there’s a tremendous amount of inventory, and people aren’t renting it out.” Another broker said median rental prices in the Hamptons fell 26% in the first quarter, CNBC reported.
According to CNBC, the collapse in rental prices for the Hamptons seen by some brokers is due to two separate factors.
On the one hand, a falling stock market, runaway inflation and general economic uncertainty could dampen demand for getaways to the Hamptons, long a home for Wall Streeters looking to escape New York during the summer lull. from Memorial Day to Labor Day.
A resurgence in overseas travel after a rise in domestic travel due to a pandemic could also mean fewer renters are looking to stay close to home for fun in the summer.
In May, Insider reported that Airbnb hosts in the United States face similar challenges as demand for short-term rentals declines after two years of growth due to the pandemic. Airbnb owners told Insider’s Dan Latu and Daniel Geiger that high inflation, the resumption of global travel, and increased hosts and listings are all contributing to a slowdown in bookings.
CNBC also reported that the past two years of frenzied home buying in the Hamptons likely means potential renters from previous years are now homeowners themselves.
“Buyers have pulled out of the rental market,” Douglas Elliman’s Morabito told CNBC.
Granted, high-priced rentals still have their place in the Hamptons. According to CNBC, another beachfront house in Bridgehamptonjust down the street from the property, listed at $1.65 million for July, is back on the market this summer – for a monthly asking price of $1.25 million.
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