If there was any confusion where New York’s uberwealthy were scrambling to dump their money in December ahead of the now official tax hike on the wealthiest, we now know: some two hours north on the Long Island Expressway, or the Hamptons to be precise. Bloomberg reports: “Home prices in New York’s Hamptons, the resort towns on the Long Island coast, rose to the highest on record as deals at the upper end of the market surged before expected tax increases for sellers. The average price of homes that sold in the fourth quarter jumped 35 percent from a year earlier to $2.13 million, the highest since Miller Samuel Inc. begin tracking Hamptons sales in 1999, the appraiser said today in a report with brokerage Douglas Elliman Real Estate. It was only the second three-month period that the average purchase price topped $2 million, said Jonathan Miller, the New York-based firm’s president.”
Needless to say the when a handful of the 0.001%, and quite close to the New Normal discount window – i.e., the Fed’s excess reserves – purchase homes with no price discrimination, it has the same impact as when foreign oligrachs come to the US to launder illgotten cash (with the NAR’s blessings), sending prices up some 35% in one year. And since the average price of all houses is dragged higher as a result, TV pundits can spin it as a housing recovery, and get consumers to consume even more by “charging it”, making the abovementioned Hamptons’ home purchasers even richer: there’s your recovery. And it is a recovery, all right, for some: like Lloyd Blankfein who just parked another $32.5 million in prime 8,000 square foot Bridgehampton mansion set on some 7.3 acres.
Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd C. Blankfein bought a seven-bedroom home in New York’s Hamptons that was listed for $32.5 million, a person with knowledge of the deal said.
Blankfein, 58, took title to the property on Ocean Road in Bridgehampton in recent weeks, said the person, who asked not to be named because the transaction hasn’t been made public. The person didn’t disclose the price for the home, which was most recently offered for $32.5 million, according to Zillow.com.
Property records reported by LexisNexis list the owner as ‘Fein, Blank.’ The sellers were Matthew Mallow and his wife, Ellen Chesler, records show. In August, Mallow, who was named earlier this year as general counsel at BlackRock Inc. (BLK), and Chesler, a senior fellow at the Roosevelt Institute, hosted a fundraiser at the house for President Barack Obama that was attended by Vice President Joe Biden, according to reports in the New York Post and on the website of the Sag Harbor Express.
“For the most discerning, this classic Hamptons estate- home, situated on magnificent grounds, offers the ideal blend of every modern convenience and amenity within its early 20th- century construction,” according to a June 2009 rental listing for the property on StreetEasy.com, a real estate website.
The home, with six full bathrooms, includes a tennis court, “sculpted gardens,” a swimming pool, and “a winding driveway to a home of which dreams are made,” according to the rental listing.
The listing price of the Hamptons home is more than what Blankfein spent for his Manhattan apartment at 15 Central Park West, according to a February 2006 regulatory filing by Goldman Sachs. He paid $27 million for that property, the filing shows.
Goldman must pay well:
Blankfein has seen his annual pay drop since he was awarded a record-setting $54 million in 2006 and $68.5 million in 2007. His 2011 compensation was $12.4 million, which included a $3 million cash bonus, $7 million in restricted stock, $2 million in salary and $449,600 in other benefits.
Last month, Blankfein reaped $5.93 million by exercising 10-year-old stock options and selling the shares, leaving him with Goldman Sachs stock worth about $209 million at yesterday’s closing price, according to company filings.
Yes it does. And now back to the Hamptons:
“There’s clear evidence of this year-end rush in anticipation of higher taxes,” Miller said in an interview. “We just had a lot of sales at the upper end of the market because the more affluent were more likely to be proactive.”
There were 49 sales in the quarter for more than $5 million, the most since 2006, when Miller Samuel began tracking that data. The quarterly average for the past six years is 23 such deals, Miller said. High earners were expecting to see their tax burden rise as Congress negotiated a budget deal into the new year. The top rate on dividends and capital gains climbed on Jan. 1 to 23.8 percent from 15 percent, including a 3.8 percent tax from the 2010 health-care law.
The median price for all luxury transactions, the top 10 percent of all sales by price, climbed 17 percent from a year earlier to $7 million, Miller Samuel and Douglas Elliman said.
Be advised: “Like, Crazy” is a technical term
“December was, like, crazy here,” said Judi Desiderio, president of Town & Country Real Estate in the Hamptons, which released a report on the market on Jan 18. The year “was like a snowball rolling downhill.”
The dollar volume of homes that changed hands in the fourth quarter surged 51 percent from a year earlier to $771 million, according to Town & Country. The median sale price rose 19 percent to $975,000.
It goes on and on and on, for those for whom, as we said above, there is a recovery. Details can be found here.