Foreclosures Now Common In Affluent Hampton Neighbourhoods

June 27th, 2008

Located in the affluent Highland Terrace in Bridgehampton, the Hamptons Designer Showhouse is built on more than 4 acres of land. The 8 bedroom home has a mortgage of $ 4.4 million and is currently in the initial stages of foreclosure. So are four other properties on the ocean facing Dune Road. Surprising?

Not any more, feel real estate analysts. The Hamptons, peppered as it is with home valued at $ 30 million and $40 million, was regarded as being above the foreclosures which are happening everywhere else in the country. Foreclosures were something which happened to other people as far as the residents of this region were concerned.

Recently however this situation is seeing a slow change. Lis pendens, the first legal notices for foreclosure are raising their heads in some places and a few homes have already been taken back by banks this year.

Alan Stein, bankruptcy and real estate attorney in Southampton, says that he has more work than ever now as the number of clients coming to see him has doubled in the past 6 to 8 months. He underlines that several of his clients are being unable to make mortgage payments even though they live in homes worth several million dollars.

Real estate agents however are not unduly worried by this turn of events. They feel that a few foreclosures were inevitable with the national economy being affected by widespread foreclosures. Rick Hoffman, regional senior vice president for Corcoran, opines “I would say we’re almost foreclosure-proof out here to some extent.”

Experts warn however that every foreclosure affects the neighbourhood. Home sales can slow down and the economy may take a downturn, if there are a significant number of repossessions. According to the founder and chief executive of Town and Country Real Estate, Judi Desiderio, “If there’s less capital in the economy to spend, then it’s going to affect all of us.”

The Hamptons may be protected somewhat by the profile of its residents. As owners of multi-million dollar properties, they are likely to have resources that could help them find various ways out of the predicament. Alternatively, the properties may be rented out in summer, generating an extra income to tide over the situation.

As real estate attorney Alan Stein is quick to point out, “Nowhere else on the Island are you able to rent for three quarters of the years’ expenses … for three months of time. That saves people.”