Dan's Papers - February 15, 2008 - A (more) International Rental Season

"You never know how many friends you have until you rent a house in the Hamptons." This quote, attributed anonymously, helps to describe the rental situation for the 2008 summer season. The concept especially holds true if you are one of the many European glitterati leading the in-crowd, rental camp this summer. With the countdown official, there are less than 13 weekends until Memorial Day - the start of the summer season. And according to Hamptons real estate agents, this year's rental market is red-hot. But more than ever, it's the visitors from Europe and beyond, not just Manhattanites and those from the Tri-state area who are renting some of the plushest, oceanfront listings on the East End. No longer just a summer retreat for New Yorkers, the Hamptons has become an international destination.

Rick Hoffman, Regional Senior Vice President, East End, of The Corcoran Group said the company is experiencing one of the "busiest, and earliest rental seasons anyone can remember." According to Hoffman, it used to be that people came out on President's Day weekend to view the inventory, and this may be attributable to relatively good weather this winter, but now they are viewing online in the comfort of their own homes, seeing something they like, and then coming out east to make the final decision."

With more people coming out earlier than usual, it's no surprise that some of the listings are going as high as $1 million for a three-month rental in Sagaponack. The 8,500 square-foot house on Parsonage Lane has a tennis court, pool, pool house and minor gym - not exactly luxury by Hamptons standards, and not even waterfront.

Hoffman also mentioned the large increase in the number of people who are doing their rental online. This could become a standard protocol in the future since companies such as Corcoran, Prudential DouglasElliman and Town and Country have all developed their websites so that potential renters can do a virtual tour, getting a feel for the house without ever stepping in the front door. The age of the .com renter has arrived.

According to Ann Rasmussen, sales associate at Devlin McNiff Real Estate, January was a very busy month for rentals and it shows no signs of stopping in the month of February. "Many of these renters have rented here before and some were just re-renting the same house early because they had heard it was busy and didn't want to lose a house they liked," Rasmussen explained. In terms of the inventory and whether or not there is more on the market because of sales, Rasmussen believes that prices are about the same this year and adds that there is "an increase in price and demand for high-end year round rentals ($80k and above) this year. Some of these houses are new and the owners want to cover their annual costs," said Rasmussen. "Many of the people who rent these houses can (and want to) buy but are putting it off for the time being."

In many ways this suggests that although inventory might be higher than usual, it has a negative impact for eager first-time renters. Renting rookies are already behind the game since veteran renters have held onto their houses, decreasing the selection for 2008.

Rasmussen also explained that requests from Europeans have not been as plentiful as reported. "I've had some inquiries from London and Ireland but most of our renters are still New Yorkers," Rasmussen added. The obvious reason for the surge in European renters is the weak American dollar and those abroad are finally traveling the world, shopping and living in an 8,000-square-foot house south-of-the-highway. A $200,000 rental for the season would translate to just over $100,000. These Euro-jetsetters will help bolster the East End's retail economy, just as they have in New York City already.

Despite the shock value of the $1 million rental in Sagaponack, that price is not the standard, most high-end rentals are seeing their caps in the $400,000 price range. But even with the roundabout talk of a softening market, the rental landscape is flourishing and landlords and real estate agents from Westhampton to Montauk could be smiling all season long.