Eastern Philosophy – A Quick Look at Hampton’s Real Estate Crackonomics.

Ever wonder why land values south of the Highway from Sagaponack, Bridghampton, Watermill and Southampton are currently north of $5,000,000?

Or why parts of Georgica, the Amagansett Lanes or the Dunes are on a distant planet from their North of the Highway counter parts?

Land size, proximity to the ocean, special scenic views, and supply variables aside..

Social Economics, Macro-economics, and even Freakonomcs suggest there are external forces that dictate how and why people spend their money, and the extra value placed on material goods, objects and “trophies”. All these factors impact supply and demand and in turn effect real value.

Social economics is why you gravitate to a special brand or a unique market place.

The car you drive or the clothes you wear says a lot about who you are, how you perceive yourself, and are very telling about your spending habits.  

Car ads never show a driver trudging off to work each day, fighting traffic, paying tolls, pumping gas, or checking for door dings in an overcrowded parking lot. Instead they feature weekend antique shopping or a beach excursion so you can imagine yourself behind the wheel being the person you wished you were. The vignettes suggest driving this model will enhance your personality or perhaps mask a character flaw. 

Crack-onomics is our attempt to explain the unexplainable. 

A status symbol can be like a highly addictive drug providing a euphoric rush. Chasing that buzz often causes the consumer to spend more money than they should.

When you pair an overabundance of money with an equal amount of options, the laws of supply and demand are tossed out the window. 

Crackonomics are examples of the extreme, and the wild in-explainable monetary mood swings within a market place. 

For instance, there’s roughly a $50,000 difference in purchasing a new Chevy Equinox vs the Range Rover Sport and a $95,000 gap between the cost of a new Subaru Outback vs the Mercedes G-550. 

All 4 SUV’s have tires, a sound system and will get you from one place to another. Yet a person making over $350k per year wouldn’t be caught dead driving the Chevy.  

Similarly there’s roughly a $5,000,000 cost spread between a 1.1 acre parcel South of the Hwy behind the corn fields (with no ocean view) in the heart of Sagaponack, and a 1.1 acre parcel in Hither Hills with 2nd floor ocean views and private beach access. 

It was probably twenty years ago that a guy making over $1M a year wouldn’t be caught dead driving past the Napeague stretch to Montauk. 

Why is that? 

The simple answer: the drive to Montauk is 20-35 minutes farther. The common complaint is, “do you know what it’s like battling Friday night traffic and then the struggle of driving back to NYC Sunday night?”

 While we understand the argument we still can’t quite wrap our brains around paying $5,000,000 more to save 30 minutes of drive time.  

A second valid complaint is the homes surrounding Montauk are not similar or comparable to the other Hamptons. You can’t argue the fact that in many cases properties are far more inferior. Most of the homes were built in the early 60’s with the same quality craftsmanship as a hunting & fishing lodge. However, with a new wave of affluent buyers and pent up demand the Montauk landscape is quickly changing.  

Comfort, privacy, quality, and luxurious amenities play an important role in assessing real value. But we still don’t understand the $5MM+ land value gap, since two of the Hampton’s most private and unspoiled beach spots, (Sagg Main and Montauk Hither Hills) enjoy the same ocean. 

Today’s smart phones and internet connectivity give people unprecedented flexibility to stay productive away from the office. As a result the Hamptons have seen an uptick in year round population growth, and an increase in the demand for the home services industry. Area home owners place a special value on their Hamptons asset.      

As more of us spend our commute time on our phone or tablet, we may not even notice 30 more minutes. That’s where the crazy world of real estate is quickly waking up to change.  

Let’s say you lost track of time on a work related conference call, or perhaps became mesmerized by your favorite mix on Spotify. Suddenly you find yourself past the old Cyrils. When you get out of the car you would find… the New Montauk. 

This is a town with an above average infrastructure and educational system. Montauk’s Pre-K through 8th grade is highly rated as one of the best in NY State. Several of their students have gone on to become East Hampton High School standouts and valedictorians. They have their own special EH Town Police Barracks. Along with Montauk Downs, their own championship level public golf course, you will also find some of the best manicured public parks in the country. The local restaurants are on par with the best in the Hamptons, and some may argue even better. 

Traditionally the case against Montauk was their stigma: it has always been considered the un-Hamptons. For decades Montaukians embraced the title “The Drinking Town with a Fishing Problem”.  In the past 20 years however, Montauk has changed from “The Drinking Town with a Surfing Problem” to “The Surfing Town with a Hipster Problem”. 

Over the past 3 years they’ve evolved quickly, adopting their newest motto:

“Montauk, Where Sitting is the New Smoking”. 

 What makes Montauk the most active Hampton in terms of Health and fitness? 

One look around and you’ll get it. They host some premier fitness events like the Montauk Triathlon, the Brew-a-thon and the Turkey Run because they have outstanding bike and running courses, as well as open water swimming venues. 

How about Spinning, Yoga, or Bells & Brew on Thursday nights under the lights? Whether you’re into SUP, or surfing there’s a beach or surf break for every level.

Do these people ever just relax? 

Oh that’s right, they have the best surf casting and deep water fishing holes for that, too.

Montauk has its share of A-list Celebrities, but the locals don’t care. Like Bigfoot they usually keep themselves well hidden.

We’re not suggesting Montauk is for the Subaru or Equinox driver in the flannel shirt. But if you’re on a real adventure, and you’ve got a SUP, Kayak, and mountain bike all strapped to the top, you couldn’t find a better location in the Hamptons. If you’ve got your yoga mat, running and golf gear loaded then an extra 20 minute drive to Montauk is well worth it.

If you are the Range Rover Sport or Mercedes G-550 type there’s nothing wrong with sitting all afternoon poolside in Sagaponack, counting the minutes until you get dressed for dinner. Sure it’s a boring way to pass the weekend, and maybe being in a more expensive setting is better suited for you.     

However if you’re a weekend warrior with a hyper active lifestyle, and want to be connected with a young-minded, health-conscious community, here are the top Montauk agents to call. (If you have $1.5M to $3.6M there’s a lot of exciting options). 

The Montauk Experts..

 

Irene and John D’Augostino, Martha Green Real Estate.

Pam Burke of Douglas Elliman.

Veronica Monte and Marguerite Davidowicz, of Town & Country.

Julia Prince and Chris Coleman, of Saunders.

Patricia Wadzinski, of Sotheby’s.

Joan Hedgner, of Corcoran.

.. and Lynden Restrepo, Atlantic Beach Realty.

Real Estate Attorney’s are also some of the best in the Hamptons: George Biondo, Andy Hammer, Gordon Ryan and Ed Butterfield.

Surveyors: there’s only 1.. Jamie Walsh is the man!

Categories Articles test

Founded by Dan Gualtieri & Noel Roberts. The editors deliver a unique blend of hard news, incisive commentary, detailed market reports, and exclusive interviews. When promising opportunities hit the market, we’re there to tell the inside story. Contact us if you'd like to submit a story or discuss a project.

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll Up