Time was, the Hamptons could count on Wall Street guys taking home enormous packages at year-end to buy up its inventory of multi-million dollar homes. They’d come to a mutual understanding, if you will. Not only would they lay out $45 million in cash for a 12-bedroom spread, but they'd be happy to pay the same for some 2-bedroom hole 2 miles from the beach because why not? Now, due to the bloody financial crisis, people are actually stopping, thinking, and in some disturbing cases, negotiating on the price.
The cluster of towns on the east end of Long Island, N.Y. has long been a vacation hub for Manhattan financiers. Its fortunes often rise and fall in fairly close sync with those of Wall Street. The year did not start well, as the first quarter median sale price slipped to $622,500 and the number of sales fell to 379, both 22% declines over the first three months of 2010, according to a report by Prudential Douglas Elliman and Miller Samuel Inc. Diane Saatchi, a senior vice president at Hamptons brokerage Saunders, said buyers have been biding their time and negotiating aggressively. About half of Saatchi's prospects work on Wall Street.
"In the old days, it was: 'My wife fell in love, so I spent an extra $10 million,'" Saatchi said. "Now, nobody wants to overspend; nobody wants to look like a chump."