New York's wealthy are returning to summer beach retreats in the nearby Hamptons, but the global financial crisis has subdued their tastes and left people wary of flashing cash, real estate experts say.
Sales and summer rentals in the Hamptons, a string of hamlets and villages along the Atlantic Ocean coast on Long Island, New York, have bounced back after an abysmal 2009 when the United States struggled through its worst recession in decades.
But with thousands of Americans still losing their homes and out of work, wealthy New Yorkers are concerned how their luxury Hamptons retreats are perceived and some Wall Street banks have warned employees to lay low, experts say.
There's a lot of populist rage out there against these bankers and these Wall Street folks, and they don't want to be the guy who rented the $500,000 house or paid $20 million for a house, said Andrew Saunders, president of Saunders & Associates.
There is tremendous pressure on the part of those people who could write a check and buy a house for $15 million to $20 million not to do it at this moment in time, in light of all the eyeballs that are on Wall Street, he said.
He said after previous economic downturns, such as the bursting of the Internet stock bubble in 2000 and the aftermath of the September 11, 2001, attacks, it had been the most affluent who were first to return to the Hamptons market.
GLIMMER OF EXTRAVAGANCE This time, it has been the more modest end of the market -- properties in the $1 million to $5 million range -- where business was picking up, he said.
Likewise, more properties are being rented for the season, from the end of May through early September, in the $50,000 to $75,000 range rather than the $150,000 to $200,000 range, he said.
More people also are buying property through corporate vehicles, rather than putting their names on documents, to avoid publicity, according to experts.
Judi Desiderio, chief executive officer of Town & Country Real Estate, said the Hamptons market was coming back from the abyss, but buyers and renters were quite sensitive to public perception.
Over the winter, when people were starting to get the news about their bonuses, there was a real hush among the people who were receiving those bonuses. They did get the word to lay low, and they were laying low, she said.
But Desiderio said Town & Country rentals were up 140 percent over last year, and landlords are no longer having to negotiate on price to seal a deal.
Things are much better, she said. People feel more secure about their jobs. They feel more secure that the world isn't going to crack wide open and suck them in.
There has also been a glimmer of extravagance, with the rental of a Bridgehampton property dubbed The Sandcastle for $500,000 for two weeks in July. The Corcoran Group, which arranged the deal, described it as a Hamptons record.
The 11.5-acre oceanfront mansion is owned by luxury builder Joe Farrell and has nine bedrooms, 11 1/2 bathrooms, a movie theater, tennis and racquetball courts, a heated pool, a disco, a bowling alley and a rock-climbing wall. The renter is an American whose name has not been made public.
Pamela Liebman, Corcoran president and chief executive officer, said buyers and renters were more cautious about how their purchases could be perceived and more concerned about value for money.
They just realize that it's more about being comfortable than showing off, Liebman said. Nobody's looking to show off anymore, and keeping a Ferrari and a Lamborghini parked in the driveway of a huge house is just not what it used to be.