The Money of Montauk: Unveiling the Secret World of The Hamptons
Updated: Oct 27, 2021
If you're from pretty much anywhere around the United States, when you think "weekend getaway," you probably think about the beach or a mountain. Being in Atlanta, our options are Florida beaches or the Tennessee Smokey Mountains. Head up there on a Friday, grab a condo or a cabin and enjoy a few days away from the hustle and bustle of every day life. But what if you live in the northeast? What if you're a finance bro working at Goldman or JPM and you need to disconnect for a few days on a government-mandated day off? Well if you're overflowing with cash and want to sit in the real seat of American power, you'll head to the secretive, shadowy stretch of island that few can afford to set foot in. This is The Hamptons.
The Hamptons seems like one of those places that started as some quaint little village and evolved into a luxury real estate behemoth, but that isn't really the case. Originally founded in the 1800's because of its "good potato ground" for farming, the agrarian lifestyle was quickly abandoned, due to its seafront nature and proximity to New York City. The wealth found this place QUICK. The New York Times wrote in 1893 about the area:
The beautiful villages clustering around old Southampton, including Quohue, Good Ground, the rest of the Hamptons, and the incomparable Shinnecock Hills combine to make as close an approach to Eden as can be found in a long journey. Exclusive—in the best sense of the word—society is here represented during the summer by its choicest spirits. Well-bred men and women find a congenial atmosphere, refined attractions in plenty, and innumerable charms about these quaint old villages.
It's made up of a collection of communities that inhabit the small outlet island just off the coast of New York, with train and ferry service adding to the highways that can now take you there. But why do people vacation here?
The homes! The homes are INSANE. Crazy. In 2016, Business Insider listed the 11962 zip code within The Hamptons as the most expensive in the U.S, with an average home listing of $8.5 million. Home prices retreated in 2019, according to the Financial Times, due to the Trump Tax Cuts that drove away potential wealthy buyers from the area who instead stayed in New York City. This was estimated to have driven the average prices down about 20% in 2019, before experiencing a rapid rebound in 2020. Why? Just like everything else, it was due to the pandemic. According to the New York Times, the average home price in The Hamptons skyrocketed 40% in 2020 due to the number of wealthy people looking to flee New York as the virus took hold.
Let's say you aren't some New York finance magnate and you don't have a casual $10 million to drop on a 7 bedroom home. Can you still visit The Hamptons? Absolutely! Just get ready to pay out the nose. This is the theme of Bravo's smash hit show "Summer House," where suspiciously attractive people rent a house in The Hamptons for the summer just so they'll have somewhere else to drink. In scanning some real estate listings, you aren't exactly going through AirBnB for these homes. Offered through private property managers and rental companies, these homes come in at a median price of $33,000 a month during the summer. What do you get for this number? Well here is YouTube real estate personality Eric Conover to explain:
As you can see, the homes here are very unique and comically gigantic. As a result, the area attracts a lot of attention from celebrities. In addition to the aforementioned Summer House, the area also brought the Kardashian's in for a season of a spin-off show "Kourtney and Khloe Take The Hamptons," where madness rained on the area for six months. Speaking of madness, "The Real Housewives of New York" frequents the area for their episodes. The region has also attracted the attention of athletes, with several NBA players calling the place home in the off-season, including Cavaliers big-man Kevin Love. The most famous Hamptons-centric story of past few years, however, belongs to Kevin Durant.
In 2016, free agent superstar Kevin Durant fled to The Hamptons for a 10 day vacation to decide his future. Under the guise of his business manager, he anonymously rented a large property in the area that was "close to East Hamptons airport" for a number of business meetings. Those meetings, it was later disclosed, were a series of NBA front-offices attempting to court Durant to their teams. The winning team was eventually the defending champion Golden State Warriors, where Durant played alongside Steph Curry, Klay Thompson, Draymond Green and Andre Iguodala, later nicknamed "The Hamptons 5."
Durant rented the home for 10 days at the cost of $100,000. He also featured the home as the backdrop to his Player's Tribune cover story announcing where he's going, giving the home incredible exposure. Turns out, the exposure probably didn't help. The property at the time was listed for $21.5 million, complete with five bedrooms, 7,400 square feet of interior space, a private pool, separate hot tub and private walkway to the beach. The home ended up switching listing companies and taking two pretty significant price cuts, eventually selling for $13.6 million in 2018.
The Bottom Line
New York real estate is something of an infatuation with me. From swanky NYC penthouses to shotgun brownstones, The Hamptons serves as the perfect extension of this style to me. I love The Hamptons, and am really excited one day to hopefully visit the area. But what do you think? I'd love to hear your thoughts in the comments below!