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The Hamptons Condo Wave

Condos in the East End are seeing the fastest market in more than a decade, with a 40% increase in sales.

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A unit at Harbor's Edge in Sag Harbor recently closed for nearly $3 million.

Saunders
A unit at Harbor's Edge in Sag Harbor recently closed for nearly $3 million.
Saunders

In the Hamptons, the condo—a type of housing some might call downright subversive in a land of imposing, multimillion dollar beach homes—is having a moment.

A spate of new condominium developments have cropped up in the posh summer getaway in recent years. Some encompass a collection of manageably sized single-family homes with a shared clubhouse and posh amenities; others feature luxury penthouses at the center of town.

"It’s a part of the market out here that people don’t usually think about, but people are starting to think about it," said Mary Slattery, a broker with Corcoran who is handling sales for Southampton Pointe, a 50-unit condo project of duplex and full-floor apartments that expects to deliver its first 11 units at the beginning of 2018.

And buyers are increasingly eager to catch the condo wave, data show. The Hamptons logged the fastest-selling condo market in 14 years last quarter. The average unit sold in only three months compared to nearly five months a year ago; and sales were up 40%, according to a report by appraisal firm Miller Samuel for brokerage Douglas Elliman.

The industrial interior of the Watchcase condominiums in Sag Harbor

The Corcoran Group

A few luxury units that have sold in recent months include a $1.07 million one-bedroom in a factory building converted to luxury homes in Sag Harbor; a $2.95 million three-bedroom waterfront apartment in the same town; and a $1.05 million three-bedroom in an East Hampton condo development touting shared tennis courts.

More:Jackie O’s $30 Million Hamptons Summer House is in Contract

In 2013, Ms. Slattery led sales at a 79-unit condo project called Bishops Pond in Southampton Village. The development, which offers residents a fitness center, pool and concierge services, included 10 luxury townhouses known as the Enclave that sold for between $1.9 million and $3 million, significantly less than the equivalent standalone luxury home. Last quarter, the median price of a luxury house in the Hamptons was $5.56 million, according to the data from Miller Samuel.

She credits Bishops Pond with raising the bar for—and interest in—high-end condo development in the Hamptons.

"Bishops Pond and Watchcase really changed the way people were thinking about condo living in the Hamptons," she said, referring to the Watchcase condominium, a 19th-century Bulova factory a developer converted into 64 luxury apartments in 2013.

A townhouse unit at Bishops Pond

Courtesy of Douglas Elliman

Those successful projects have helped lift condo prices in the Hamptons. Developer Fairfield Properties has quadrupled prices in the newly launched Southampton Pointe since 2009, when they expected to sell units for around $400,000. They’re now listing the condos for between $1.165 million and $1.25 million, Ms. Slattery said.

"It’s been a revival over the past five years. Before that there weren’t any major developments," said Ernest Cervi, regional senior vice president of Corcoran’s East End office. "The results have developers thinking."

More:‘New Modernism,’ Smaller Footprints Gain Popularity in the Hamptons

Condos hold about 4% market share in the Hamptons, owing in part to their relatively limited number. Last quarter there were only 89 condos on the market compared to 1,377 single-family homes, according to data from Miller Samuel.

There are several zoning applications pending with local municipalities for high-end developments. Next week, East Quogue’s Town Board will hold the final public hearing over The Hills, a luxury golf resort by Arizona-based Discovery Land Co. that would house 118 residences.

A series of developers have also eyed the site of an old lobster restaurant in Southampton for condo development. The lot is now on sale for $11.5 million with Douglas Elliman, which is marketing the property as an opportunity to build 13 luxury homes or 25 townhouses.

Carl Benincasa, regional vice president for sales for Douglas Elliman, said demand is coming from buyers who want to own in the Hamptons without the fuss of upkeep.

More:At $175M, Former Ford Family Estate Will Be the Most Expensive Hamptons Listing

"People realize that giant houses are difficult to manage," Mr. Benincasa said. Some recent condo developments are in town centers, "they are more convenient and more affordable."

"There is this trend in luxury lifestyle, they are trading size for convenience," he added.

Condo living often offers buyers more amenities than they could afford if they bought a single-family home for the same price, said Sheri Winter Clarry, a Corcoran agent who is leading sales on the new Harvest Pointe development in Cutchogue.

At Harvest Pointe, a condominium targeting baby boomers, owners get concierge services, wine bottle storage, yoga classes, a clubhouse with a bar, a 50-foot pool and maintenance.

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