Southampton Homes Articles

Big firms bulk up on Long Island's East End
Lauren Elkies

Size does matter in the residential real estate business on the East End of Long Island.

The big companies -- brokerages that are also among the biggest in Manhattan -- dominate the market on the South and North forks.

The Corcoran Group heads the procession with 413 sales professionals, followed by Prudential Douglas Elliman with 295 and Brown Harris Stevens with 171, according to company data.

Corcoran achieved sizable growth over the last several years after a string of acquisitions of smaller local firms throughout the East End.

Within the last year alone, Corcoran's parent company acquired Allan M. Schneider Associates, adding offices in the North Fork and around 200 agents.

Judi Desiderio, president and founder of the 51-agent Town & Country Real Estate, which is not among the area's largest firms, said, "Corcoran bought 70 percent of the agents."

Elliman added 20 agents to its ranks in the last year, according to the company's Web site and April 2006 data from Suffolk Research Service.

Brown Harris Stevens -- the exclusive Hamptons and North Fork affiliate of Christie's Great Estates, a subsidiary of Christie's -- added 51 agents in the last year.

George Simpson, owner of Suffolk Research, a property records company in Southampton, boiled the real estate landscape down: "There are the top three biggest companies; then there are a bunch of dogs and cats."

Of course, the top firms themselves are happy to boast about their size, too.

"Size does matter in terms of the services we can provide to our customers and clients," said Jay Flagg, a real estate broker and manager of the Southampton office at Prudential Douglas Elliman.

"You need to have certain infrastructure today to provide the highest quality service to your customers and clients. That takes immense resources."

But Desiderio said she does not wish to have a massive company.

"Size matters to a point.

But out here, people want individual attention," Desiderio said.

At the end of the day, the big companies "will do the quantity thing.

We will do the quality thing."

Since her small operation celebrated its six-month anniversary in April 2006, she has almost doubled her agent pool by about 20 agents.

Corcoran, Elliman and Brown Harris Stevens have some of the priciest home listings -- ranging all the way up to $29, $45 and $35 million, respectively.

But small firms have some of the highest-priced listings too, in addition to the big guys.

Town & Country has many multi-million-dollar single-family home listings, as well as commercial properties including the $55 million exclusive for the 10,000-square-foot waterside East Hampton Point Resort & Marina property.

A smaller, high-end niche player is Sotheby's International Realty, with 82 agents.

Its size stayed flat from last April, according to the company's Web site and Suffolk Research.

Focusing on deals in excess of $20 million, "they have three good, solid offices," Town & Country's Desiderio said.

Desiderio said adamantly, "I'm not for sale."

Get a Bonus, Buy a House?
VALERIE COTSALAS

THE competition to buy expensive summer houses on Long Island is starting earlier this year and is being played out at a faster pace than last year, some East Hampton and Southampton real estate brokers say.

They believe that the market is being fueled by colossal Wall Street bonuses. A few even report bidding wars on million-dollar properties, and sales above the asking price.

What's more, the activity is not limited to the East End. There are also reports of strong markets in the blue chip neighborhoods of Nassau County's North Shore, where second-home buyers want to spend the summer closer to the city and to the Gold Coast's best golf courses.

At the Prudential Douglas Elliman office in Southampton, Jay Flagg's analysis of the market for expensive second homes is typical of many brokers'. Sales are already outpacing last year's, he said, and a good portion of those sales will close in March and April with Wall Street bonus money.

Wall Streeters usually know what their bonuses are going to be in late fall, Mr. Flagg said, and this year his office saw such buyers searching for East End homes in late November and early December. He credits Wall Street bonus money with sales of two homes that have gone into contract for more than $20 million each this year, Mr. Flagg said.

"My particular office in Southampton was up 50 to 60 percent in 2006 over 2005," Mr. Flagg said. "This year will already surpass last year." He has also seen many lower-priced (for the Hamptons) deals as well, he said, including $6.5 million for a teardown on 1.85 acres.

Farther east, in East Hampton, high-priced "spec" homes -- designed and built based on speculation that future buyers would appear -- have been in demand, according to Diane Saatchi, an agent with Corcoran's East Hampton office. "The big surprise for everybody is that there are a couple of spec houses upward of $18 million, and they are getting a lot of attention," Ms. Saatchi said.

Two of those homes are on the south side of Further Lane -- the Fifth Avenue of East Hampton -- with access to the ocean. Another, on Georgica Pond, is priced at more than $30 million, Ms. Saatchi said.

One seller of a spec house in Sagaponack recently turned down a $10.5 million offer when the house was nearly completed, according to Lawrence Porter of Brown Harris Stevens's Westhampton Beach office. Sagaponack is "very, very Wall Street and very in demand," Mr. Porter said.

Judi Desiderio of Town and Country Real Estate in East Hampton Village said there had been a big increase in the number of bonus-toting home buyers so far this winter. "They literally hop on the jitney and come rolling in," Ms. Desiderio said.

Last year, she added, "we were waiting with bated breath" for the Wall Street buyers to come with their bonus checks in hand. But that didn't happen. This year, things have changed.

"I would honestly say that in December and January, this area, East Hampton, saw more business than it saw in the whole year of 2006," Ms. Desiderio said. Prices for ocean property, starting at a half-acre, range from $10 million to $15 million, she said. One bidding war involved three buyers vying for a home in East Hampton village in need of a complete renovation, Ms Desiderio said. That house sold for slightly more than its $999,000 asking price.

Paul Brennan, an agent and the manager of Prudential's Hamptons offices, is more restrained in his assessment of how many wealthy traders, hedge fund managers and other financial types are actually scouring Long Island for property. He says that Wall Street bonus money is harder to come by than most brokers admit.

"I think people think that there's this tsunami of money that's going to come out here," Mr. Brennan said. "I do think you'll see various sales, but I have not seen the entire market raised because of Wall Street money."

Longtime brokers also discourage the notion that flush Wall Streeters will pay more than a property may be worth. "The reality is, since Labor Day 2005, there isn't that sort of frenzy," Mr. Flagg said. "People want some relationship between price and value."

Several real estate brokers described the Wall Streeter as a careful investor who knows the market.

"Most of the time, people have shopped on the Internet, they have friends in the Hamptons, they know what people paid," Ms. Saatchi said. "They really do their homework."

It is not just real estate agents who see an upturn in the market for expensive homes; some mortgage brokers have seen a similar surge in inquiries about financing Hampton summer homes.

"What's not typical this year is that normally, the first two weeks of January are dead," said Ellen Bitton, the owner of Park Avenue Mortgage Company, a brokerage with offices in Manhattan, Bridgehampton, Palm Beach, Atlanta, Pennsylvania and New Jersey. This year, "I was so busy the first two weeks of January; there was just an incredible flurry of business."

Many of her clients are from Wall Street companies like Goldman Sachs and other investment firms whose bonuses have been higher than in recent years, she said.

But, she added, "we're just six weeks into 2007 and this wonderful flurry of business does not mean that all of the woes of the real estate market are behind us necessarily."

And not all Wall Streeters choose to buy on the East End. On the "Gold Coast" of Nassau County's North Shore, summer rentals have been moving briskly since December. Second-home sales have also been up, some brokers there say.

Interest has been particularly strong among second-home buyers looking near the region's premier golf courses -- Piping Rock Club and Creek Club in Locust Valley -- according to Margaret Trautmann, an agent with Daniel Gale Sotheby's International Realty. This continues a trend that has been growing in the last two years, she said.

One 12,000-square-foot house in Matinecock, close to Piping Rock, sold recently for $4.5 million to a Wall Streeter, Ms. Trautmann said. "And it's a weekend house," she added.

Often summer-home buyers in the area have rented in the past and have friends who do the same. When the rental periods run out, the renters sometimes buy.

The limited inventory of rentals, usually owned by people who summer elsewhere, are being snatched up quickly this year, according to Suzanna Muir, a rental agent for 12 years in the Locust Valley office of Prudential Douglas Elliman.

"Before the end of December, people started to call," Ms. Muir said. In past years, the earliest calls came in late January or February.

Prices range from $6,000 a month for year-round rentals, up to $50,000 a month for a 13-bedroom house on Centre Island for the summer, Ms. Muir said. She rents about six houses a month year-round, she said.

"Last year, rentals were very, very slow," Ms. Muir said. "But this year it has picked up incredibly."

Southampton Mansion Asking $48 Million
Michael Calderone

Out on the East End, where many New Yorkers dream of being right about now, there is a high-priced mansion soon hitting the luxury market.

In Southampton, telecommunications mogul Donald Burns is preparing to list his massive house on Lake Agawam for $48 million, according to a source with knowledge of the listing.

Located on 10.5 acres, the grand home has a distinguished legacy since it was built in 1911. Architect Goodhue Livingston, of the renowned firm Trowbridge & Livingston, both owned and designed the home-which measures over 20,000 square feet. Mr. Livingston's firm also designed such notable buildings as the St. Regis Hotel, the J.P. Morgan headquarters on Wall Street, and the Hayden Planetarium.

Decades later, the family of Hamptons real-estate broker Michael Shaheen owned the palatial house, before selling it to Mr. Burns for around $20 million in 1999.

The sprawling property is comprised of three parcels: in addition to the main house, there is a 19th century barn and a seperate guest cottage. Also, there are two pools (one for the guest house, of course), a spa, and tennis courts.

Brokers Jay Flagg and Raymond Smith, of Prudential Douglas Elliman, will be listing the property, according a source. Mr. Flagg declined to comment