Southampton South Report – 2Q 2010

The following properties transferred in and around Southampton Village, South of the Highway, in 2Q 2010:

22 Captain's Neck Lane, $5,425,000

20 Henry Street, $1,550,000

78 West Prospect Street, $542,000

49 Pelletreau Street, $2,300,000

130 Harvest Lane, $1,250,000

75 Halsey Avenue, $1,150,000

520 Hampton Road, Unit 28, $740,000

21 Huntting Street, $2,200,000

5 Huntting Street, $4,100,000

134 Somerset Avenue, $1,442,000

Part I  Of 465 Captain's Neck Lane, $12,250,000

Part II of 465 Captain's Neck Lane, $12,250,000

727 Hill Street, $2,300,000

76 Harvest Lane, $1,543,000

35 Willis Street, $412,000

600 Mecox Road, $2,425,000

963 Cobb Road, $2,200,000

285 Hill Street, $3,200,000

456 Old Town Road, $1,618,950

45 John Street, $1,440,000

199 Halsey Neck Lane, $5,700,000

156 Meadowmere Lane, $3,850,000

224 Hill Street, $2,050,000

7 First Neck Lane, $1,925,000

6 Ox Pasture Road, $3,950,000

52 Rogers Avenue, $2,050,000

10 Juniper Lane, $450,000

749 Hill Street, $3,925,000

128 Halsey Street, $890,000

153 Breese Lane, $3,725,000

351 Little Plains Road, $7,000,000

302 Downs Path, $7,500,000

14 Maple Street, $975,000

177 Captain's Neck Lane, $5,823,750

27 Johnny Lane, $1,450,000

Average Price: $3,188,620

Median Price: $2,200,000

Notable Sales From my Weekly "Transaction Highlights" column in the Southampton and East Hampton Press:

465 Captain’s Neck Lane, Village of Southampton, $25,000,000 (Vacant)

This sale, the highest of 2010 to date, is comprised of 2 adjoining vacant parcels.  The lots are almost identical.  Each is approximately 4 acres just South of the Southampton Village center and each fronts directly on Heady Creek and faces due West providing for sunset views.  Because these are single and separate parcels, an owner could choose to construct two entirely separate homes or a large home on one and guest cottage on the other.  There is a pre-existing dock on one parcel, which may effect valuation of the lots as it is extremely difficult to obtain permission to construct a dock today.

This sale presents an interesting case study in real estate flipping over the last 15 years.  In 1994 this property was purchased for $3.1 Million by an owner who sold five years later, in 1999 at the height of the dot-com bubble, for $6.5M, reaping a 15% compounded annual return.  Two years later it was sold for $8 Million, for an 11% annual return.  The next owner held it for five years, and sold it at the height of the real estate bubble in 2007 for $21 Million, reaping a gross profit of about $13 Million, an enormous 22% annual return.  This sale for $25 Million, by the owner who paid approximately $21 Million at the height of the market, represents a 5% return.  While this may not seem like a good return, especially in comparison to previous owners, it is important to consider that during the same time period many assets dropped in value by 30% or more.  Even in the worst of times high quality vacant land in the Hamptons can be a safe investment and in the best of times it can offer very large returns.

302 Downs Path, Southampton Village, $7,500,000.

Seller purchased this 1.4 acre property in an excellent South of the Highway location in 2003 for $2,000,000.  At that time it was improved with a 3,300 square foot home built in 1987 and a vinyl swimming pool with deck.  Seller tore down the existing home and pool, and in 2006 built the present residence; a 5,800 square foot colonial with 6 bedrooms.  The common areas include a double-height entry, chef’s kitchen, great-room, and living room with fireplace.  There is also a finished basement with theatre and game room.  Outside a gunite pool and patio were installed.  Since 2003, land value has appreciated in this neighborhood at around 8% per year compounded annually.  This figure would give us a present land value of around $3,500,000.  If that is the case, seller’s improvements would be valued at $4,000,000 which is about right: $1,000,000 for the finished basement, pool, pool-house, patio and landscaping, and about $520 per square foot for the main residence.

285 Hill Street, Southampton Village, $3,200,000

This home near the center of the Village of Southampton was originally constructed in 1848.  Like many historic homes, it sits on what has become a busy road.  The house, located on .9 acres, is a classic “summer cottage” in appearance and, like other houses of the period, has many rooms that are small by today’s standards where an open floor plan is often favored.  The central, original portion of this house has a music room, sunroom overlooking the grounds, eat-in kitchen and living and dining rooms with fireplaces.  There are 6 bedrooms, including one that is primarily a reading room in an upstairs turret, and a separate wing with game room and art studio.  The grounds contain lovely mature landscaping and a circular pool with pool house.  This old house has changed hands twice in the last 15 years, with each owner altering and expanding it, to its present 4,500 square feet, and it is difficult to estimate the cost of each renovation and expansion.  But this sale price, which is quite reasonable for a large and interesting home of this quality, illustrates that historic homes can be very good values if one is willing to live in a central and somewhat busy location.