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Hamptons home shoppers want luxury, but they also want discounts

[NEW YORK] Luxury-home buyers in New York's Hamptons splurged on costlier properties in the first quarter - but not one of them paid full price.

There were 37 deals for US$5 million or more, the most for a first quarter in four years, according to appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate. All were at less than the asking price, reflecting the realities of a market where luxury inventory is creeping steadily upward, said Jonathan Miller, president of Miller Samuel.

At the end of March, listings in the luxury category - the top 10 per cent of the market - were up 13 per cent from a year earlier to 298, the firms said in a report Thursday. At the current pace of deals, it would take 19.9 months to sell them all, the slowest rate in four years.

"There's more trepidation than there was last year," said Carl Benincasa, a regional vice president at Douglas Elliman who oversees sales in the Hamptons. "You just see a buyer pool that's expecting price reductions." Changes in the federal tax law and stock-market volatility have given Hamptons buyers - most of them Wall Street's rank and file - pause in their search for a fancy vacation home. Luxury sales, defined in the quarter as those priced at US$4.23 million or higher, fell 6.3 per cent to 45, the firms said. The median price of those transactions, however, jumped 28 per cent to US$6.6 million. That suggests that buyers, lured by the prospect of getting a bargain, bought pricier properties this year, Miller said.

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Some buyers delayed closings until they fully understood the implications of the tax overhaul, including its new limits on deductions for mortgage interest and state and local levies, said Ernest Cervi, senior vice president at Corcoran Group, which also released a report on the Hamptons Thursday. The weather didn't help things either. Several major snowstorms during the quarter meant agents had to bring shovels to showings, he said.

Sales at all price points across the Hamptons fell 21 per cent from a year earlier to 528 homes, according to Corcoran Group. On the upside, demand for summer rentals is strong, Mr Cervi said.

"That always leads to sales down the road," he said.