Licensed as Timothy G. Davis, Lic. Assoc. R.E. Broker At The Corcoran Group
Hamptons Magazine- 7/13/2012
COASTAL PROPERTY REMAINS THE MOST SOUGHT AFTER HAMPTONS ACREAGE.
"Oceanfront property is the most sought after, most pristin, and most prestigious." - Tim Davis
Despite a shoreline that stretches for miles, much of which is dotted with houses, ocean?front property in the Hamptons is still hard to come by because demand for it rarely declines, other than some occasional trends to the contrary-- ?like woodsy retreats or horse farms north of the highway. "The Hamptons are for people who are waterfront-oriented, so the oceanfront is still the most prime [locale] in the market," says Tim Davis, senior vice president with The Corcoran Group, who in March sold a 6,000-square-foot contempo?rary with a looping path to the beach at 174 Further Lane in East Hampton for $28 million, after it was listed for $32 million last summer-- that's a 13 percent discount, and the property's renovation was not even complete. Still, the deal, which remains one of the larg?est of the year in the Hamptons, highlights the resiliency of oceanfront property. While the housing collapse caused some homes to lose 40 percent of their value, Davis says, there was never more than a 20 percent drop with oceanfront property. "It is the most sought after, most pristine, and most prestigious, if you will," he says.
In East Hampton, that pres?tige can be conferred most reliably with homes on Further Lane, Lily Pond Lane, and West End Road, where properties that nuzzle the Atlantic will start at $20 million but possibly cost as much as five times more. Neighbors here include entertainment and fashion mainstays like Jerry Seinfeld on Further and Steven Spielberg and Kelly Klein on West End.
Southampton, meanwhile, has comparably jaw-dropping proper?ties along Gin Lane, as well as Meadow Lane, which hugs a bar?rier beach with sweeping views of the waves. These neighborhoods presumably are savored by residents such as Forbes-esque boldfaced names like David Koch and Leon Black.
For the past couple of decades, the prevailing oceanfront look involved a symmetrical mix of gables, shingles, and brick chimneys in a 20th-century nod to the historic home styles of the 19th century, when the Hamptons first drew summer visitors. Typifying this kind of architecture, perhaps, is 1900 Meadow Lane, a for-sale six-bedroom mansion with a pool, tennis courts, and a plethora of dunes, set on about five acres of land. Listed with Davis for $34 million this property formerly belonged to billionaire financier Teddy Forstmann.
Oceanfront homes that are one rung down in terms of price, from $15 million and up, also turn up in these coveted areas, though they often need work because they are dated or show wear and tear. For instance, a $14.5-million property at 1370 ?Meadow Lane, listed by Harald Grant senior vice president of Sotheby?s International Realty, is a 6,000-squarefoot home on a pine-tree flecked two-and-a-half acres; a buyer could easily raze it for a larger 10,000-square-foot residence, he says. Yes, building on these skinny slivers of land where flooding is a risk is not for everybody-- the premium in terms of construction costs can be in excess of 40 percent--but brokers say that has hardly dampened interest.
Builders have also gravitated toward teardown opportunities in Bridgehampton, along popular Surfside Drive, where new homes typically run from $15 million to $30 million. Similar prices are found on Gibson Lane and Daniel's Lane in Sagaponack, where oceanfront parcels were underdeveloped for decades. Here buyers can find ocean front homes with large lots-around three acres-comparable to East Hampton or Southampton.
When available, the waterfront can offer more affordable packages, too. Along the Atlantic Ocean in Quogue, on Dune Road an oceanfront home might cost $7 million to $20 million, depending sometimes on if you have to go to the second floor to see surf. In Montauk, along Old Montauk Highway, where Robert De Niro vacations, real estate ranges from $5 mil?lion to $25 million, brokers say.
And toward the bottom of the totem pole, in the $3.5 million to $6 million category of oceanfront properties, buyers can find a home in West Hampton Dunes, along yet another Dune Road. Throughout the past two decades, this area has undergone a massive beach restoration project that in turn fueled a luxury home building boom. However, rules about how much square footage can go up on a lot grew more restrictive during the process.
While waterfront's popularity remains strong across generations, living near the high tide line can come with challenges. Federal Emergency Management Agency rules stipulate that new homes built close to the water, or ones undergoing a renovation to increase its size or value by 50 percent, need to be set on pilings about 5 feet to 11 feet above the high water mark, depending on zoning, topography, and proximity to water, to make them less prone to flooding. Though that extra eleva?tion can give them a hulking odd-man-out presence relative to their neighbors, the homes benefit from having an area through which waves can pass without doing major damage, says Hamilton Hoge, who has been building homes in the Hamptons for more than 25 years.
Insurance may also be a hurdle. Since Hurricane Andrew walloped Florida in 1992, insurers have been increasingly wary of the risks involved with oceanfront properties on the East Coast, particularly in New York, because of its ?sheer congregation of value,? says Tim Brenneman, managing director of East Hampton?s Cook, Hall & Hyde, a local insurance broker.
For a $25 million property on low-lying Dune Road in Southampton, owners might have to go with an insurer who deals with high-risk clients like Lloyd?s, and it could cost $50,000, plus up to a $250,000 deductible for wind damage, even if the house was FEMA-compliant, Brenneman says. The Chubb Group of Insurance Companies, which deals with many high-net-worth individuals, might also be an option, especially for those who have other homes throughout the country, and thus were giving Chubb more business, he says. In that case, the premium could be $20,000 a year.
But insurance costs are rarely a deterrent because people who buy oceanfront are so driven to live by the sea, says Marcella O?Callaghan, a senior vice president with Corcoran. ?If you want to be on the water, you will do whatever it takes to be on the water,? she adds. ?Period.?