NY's wealthy return to summer retreats in Hamptons

Wed May 19, 2010 4:02pm EDT
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By Michelle Nichols

NEW YORK (Reuters) - 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.   Continued...