Edited by: TJVNews.com
When affluent New York City dwellers decided to conduct a mass exodus out of the Big Apple during the height of the dreaded Covid-19 virus, many opted to move east of the city and purchased homes in the upscale Hamptons on Long Island.
Because of the buying spree that ensued in the first half of 2020 and thereafter, home prices naturally shot up quite dramatically in the storied vacation hot spot for the rich and famous.
Having shelled out a hefty chunk of change for these mansion-like residences, it now appears that these new Hamptons homeowners want to make some money back on their investment. As such, over the last two summers, homeowners in the gilded enclave on the east end of Long Island have listed their places for rents that can only be described as astronomical.
A report on the Business Insider web site offered an illustration of those Hamptons homeowners who sought to recoup their costs. The report indicates that one oceanfront mansion, bought for more than $16 million last year, is now listed for $1.65 million for the month of July.
This summer, however, could be quite different for both homeowners and renters. According to a CNBC report of May 31st, the supply of rentals in the Hamptons is surging, leading to a wave of last-minute price cuts. Median rental prices in the first quarter fell 26%, according to Jonathan Miller, CEO of Miller Samuel. Brokers say some owners are slashing prices by 30% or more just to fill their properties.
“There is a tremendous amount of inventory and people are not renting it,” said Enzo Morabito of Douglas Elliman. “And it’s across all segments, from the very low to the very top of the market.”
Morabito told Robert Frank of CNBC that he represented one waterfront rental that was asking $70,000 a month, but a potential renter offered just $45,000.
“We were hoping the renter would split the difference, but it’s a different market right now,” he said.
Being that there is now on a glut on homes for rent in the Hamptons, homeowners find themselves in a position where they have no choice but to drop their summer rental prices.
Business Insider reported that the number of people seeking to rent in the Hamptons for the summer could be drastically dwindling. During the Covid pandemic when traveling abroad was not even a consideration, many people flocked to the Hamptons and limited themselves to domestic travel.
Now that many believe that the nation has turned the corner on the pandemic and its deleterious effects, people are once again opting to for European vacations or other overseas destinations.
Other factors that could be persuading summer renters to stay clear of the Hamptons are economic uncertainty, skyrocketing inflation and the bleak prognosis of the falling stock market, according to the Business Insider report.
In May of this year, Business Insider reported that Us based Airbnb hosts are also facing a similar dilemma as Hamptons homeowners as the demand for short term rentals has seen a drastic decline after two years of pandemic-driven growth.