Bargains in the Hamptons, if you're rich

updated 7:08 a.m. ET May 22, 2009

BRIDGEHAMPTON, N.Y. - The good news is there are bargains to be had in the Hamptons real estate market. The bad news as Memorial Day beckons, is you will still need deep pockets, aka millions, to get in the game.

Eastern Long Island’s summer destination for the ultra-rich and famous has not been immune to the worst recession since the end of World War II, brought on by a nationwide collapse in the housing sector and the collateral damage throughout the banking industry.

But brokers and developers in the confederation of villages and hamlets stretching 40 miles along eastern Long Island’s south shore contend that after a financially disastrous winter, Wall Street’s recent stock market rally has inspired optimism.

“Right now, it’s as if somebody opened a spigot,” says Manhattan attorney and Hamptons developer Alan Schnurman. “Everybody is out shopping and the game is how low can they (prices) go.”

Gary DePersia, senior vice president of the Corcoran Group — a major Hamptons real estate player — said his office has seen significant activity in the past two months, but noted asking prices are down. Bargains of 30 or 40 percent off are not unusual, he said.

“At the height of the market in 2007, a house may have been selling for $12 million,” said DePersia. “By the end of 2008 ... there may have been some intermediate price drops on that house to maybe $10 million and it eventually sold in the mid-eights.”

DePersia says many factors have aligned for bargain-hunters looking for a vacation home, which is the typical Hamptons shopper. “We have increased inventory, lower prices and sellers who are more negotiable, and cheap interest rates,” he said.

A survey by Prudential Douglas Elliman released last month found that the median sales price for a home in the Hamptons fell almost 24 percent to $675,000 from the same time a year ago. The number of actual homes sold plummeted by almost 54 percent.

“The good times rolled for so long that everybody who had money bought,” said author Steven Gaines, a Hamptons real estate aficionado who hosts a radio program on Hamptons culture every Sunday from the lobby of the American Hotel in Sag Harbor.

He said many who bought in the Hamptons in the past few years are now taking a wait-and-see approach to the market, although there have been some victims of Bernard Madoff’s Ponzi scheme who have had to sell. He declined to name specific victims, noting many are sensitive about publicity.

Generally, though, Gaines said few people are hurting economically, relative to the rest of the country. “When you reach a certain amount of wealth, like a lot of people in the Hamptons have, you’re only half as rich as you were,” he said.

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