Rentals Selling Like Crepes
Europeans are fast and loose with their euros
 Kate Maier |
(1/17/2008) European jet-setters will be among those setting up camp this summer at the most luxurious rentals the South Fork has to offer. According to real estate agents, this year’s rental market is hot, with oceanfront properties being snapped up and prices rising for the first time in years.
A $1 million rental listing in Sagaponack made headlines last week — the landlocked Parsonage Lane property is also for sale for $19.9 million — but most of the high-end summer rentals are more reasonably priced, in the $400,000 range.
Factor in a weak United States dollar, and the time is ripe for travelers from abroad to try out that 7,000-square-foot mansion in Georgica and enjoy all the amenities of south-of-the highway living at $300,000 for the season — translating to just over 200,000 euros.
“This is the first time in all my years of doing this that I’ve seen this many of my customer base coming from Europe,” said Judi Desiderio, a chief operating officer of Town and Country Real Estate in East Hampton, who has the Georgica listing along with several others in the $500,000-plus range on her company’s Web site.
According to Rick Hoffman, regional senior vice president for the Corcoran Group, “With the dollar at historic lows against the euro, that’s a great incentive” for many Europeans to travel, and to shop. Mr. Hoffman predicted that globe-trotting seasonal residents would bolster East Hampton’s retail economy this summer, as they have done in New York City.
He said he has noticed an influx of Europeans over the last two or three years, but added that this year, “we’ve had an incredible start to our rental season” across the board.
“When you look at luxury resorts around the world, the Hamptons are an ideal destination,” he said, and “Europeans are exploring the world right now,” thanks to a strong currency.
According to Ms. Desiderio, many visitors from overseas are seeking to rent for odd periods, such as the last week in July plus the first three in August. In most cases, landlords try to rent for the full season or at least by the month, but with this crowd, “they don’t care, they’ll pay for the whole season,” Ms. Desiderio said, even if they’re only planning on staying for half. “It’s great for the landlords.”
In some cases, renters won’t even see the houses they’ve plunked down $500,000 for until their summer vacation starts. According to Ms. Desiderio, “they’re doing it online. Some people are not even coming over” to check out the property before they sign.
“It typically starts with looking at the houses online or via e-mail,” said John Gicking, a senior vice president at Sotheby’s International Realty’s East Hampton office, who agreed that the number of foreigners will be large this year. “They might have friends who are here look for them, or come over themselves. Some people will do it sight unseen,” he said. “I don’t do that, but it does happen.”
“We’re getting inquiries from a lot of European counties, and they’re mostly looking for larger and more prestigious houses,” he said, adding that both repeat customers and first-timers are on his list of clients.
This year in particular, a lot of referrals are coming in from overseas. “I could say that I’ve had more new rental customers coming from Europe this year than I have ever in the past. I just got a call on Friday from a British woman in East Hampton who sent over her best friend looking for the summer,” he said.
“This year and last year, networks, whole clusters of people that all know each other, have been coming over for the same period,” Ms. Desiderio said, adding that word of mouth has been working out very well for her agents.
The length of the rental season “can vary greatly,” Mr. Gicking said. “It used to be Memorial Day to Labor Day, but the rental market has become a little more fragmented than it used to be.”
Higher prices have forced some renters to settle for a monthlong vacation in August, for example, instead of staying for the whole season. Also, “a lot of homeowners realized it’s a good time for them to go on vacation themselves, and make some income on their houses,” Mr. Gicking said.
According to JR Kuneth, an agent at Devlin McNiff Real Estate in East Hampton, a national perception that “the Hamptons market was overvalued” may have turned some sellers on to renting. But in his eyes, the high-end market is still moving. “Yesterday, I took out a customer that we’d rented with last year, and the house they’d rented was sold,” he said. And in places like Amagansett, he said, “the rental inventory is down.”
“This year we didn’t have that frenzy and that pressure because they all thought prices would come down in the spring,” Mr. Kuneth said. But now, “everybody’s coming in at the same time.”
“We’re getting a lot more inquiries in all ends of the market,” Mr. Gicking said. “I have someone looking at a house that’s $85,000 for two weeks in August, and I have someone looking for a $400,000 rental for the whole season. I think the high end in particular is very strong, and, as usual, there are not enough important houses available.”
With a busier than usual start to the season, realtors agreed it would behoove summer house hunters to act early. According to Ms. Desiderio, “if you want something on the ocean, you should get it within the next 30 to 60 days.”