I
n a packed seminar at LTV studios in East Hampton, real estate experts gathered to dissect the current market and its peculiarities. Patrick McLaughlin, associate broker with Douglas Elliman, set the stage for a lively discussion, introducing Jonathan Miller of Miller Samuel Real Estate Appraisers as "the big dog" of New York real estate.
Miller's assertion that inventory is the most critical metric in housing today resonated with the audience. He attributed the current market distortion to the Federal Reserve's prolonged low-interest-rate policy during the COVID era, which eviscerated the housing supply and drove prices up. The problem, Miller explained, lies in the existing supply, where 90% of homes are existing stock, while new construction accounts for only 10%. Even if new building tripled, it wouldn't significantly impact the market.
The panelists concurred that Long Island's North Shore is a unique case, with prices continuing to rise despite the inventory shortage. Maggie Keats, Douglas Elliman's No. 9 top sales agent nationwide, shared a story about two sellers who were hesitant to list their properties due to volatility in the financial markets. Miller noted that even cash buyers care about interest rates, which is an indicator of market safety.
Rocco Carriero, a wealth consultant with Ameriprise Financial, observed that the Hamptons market has performed exceptionally well, appreciating 7-8% compared to Long Island's 4%. However, Carl Benincasa, a land use attorney from Southampton, pointed out that the higher-end sector is less affected by interest rates and market conditions. He noted that mortgage-dependent buyers in the $3 million and below range are experiencing a slow market.
The experts warned real estate investors about the pitfalls of high interest rates, low inventory, and the high cost of building. Miller highlighted that New York City rents are at an all-time high, making it challenging for landlords to achieve a decent return on investment. Benincasa emphasized the importance of navigating the permitting process in towns like Southampton and East Hampton.
As the discussion wrapped up, the panelists agreed that timing is everything in real estate. Carriero quipped that his friend has been waiting 20 years for the market to drop in Montauk, suggesting that it's better to buy and wait than wait and buy. Amidst the uncertainty surrounding tariffs, Miller cautioned that the next four to six months will be marked by murkiness.
In a final note of reassurance, Keats emphasized that single-family homes remain a solid investment opportunity, despite stratospheric prices. When asked where she would put her money, she quipped, "I'm putting it in my mattress."
