Yes, places like Las Vegas and Detroit have it tough when it comes to falling home prices, but the tony Hamptons, a collection of affluent towns on New York's Long Island, is also feeling the pinch, according to reports.
Median sale prices Hamptons and North Fork declined by 22 percent to $622,500 in the first quarter of 2011 compared to the prior year, according to a report by by Douglas Elliman. For the same period, sales of high-end market homes over $5 million declined more than 50 percent.
But the worst may be over, at least for the luxury market, experts tell ABC News.
"What's really interesting is the rear-view mirror," said Bobby Gianos, president of East End Properties, a development company based in Southampton, New York. "The last 60 to 90 days have been outstanding. The second quarter statistics I expect to see will be mind-boggling."
Gianos said the the last 15 days has been particularly frenetic for sales of homes in the above $15 million range. He said the last time he has seen such activity was 2007.
The Long Island neighborhoods are still a magnet for the wealthy. In the Manhattan vacation zone, money from Russia, Germany, and South America is flooding into the luxury market.
George Simpson, owner of Suffolk Research Service, explained that The Hamptons have traditionally benefited from Wall Street, which is not enjoying the kind of cash bonuses as in years before the recession. He's not optimistic about the numbers for the overall market in the second quarter. "We don't have them yet for this quarter and they're not encouraging."
Across the nation, home prices experienced what experts call a "double dip". U.S. home prices fell 4.2 percent to 2002 levels after falling for eight months in major metro areas across the nation, according to the S&P/Case-Shiller Home Price Index.
Even in the tony area of East End, the real estate market is experiencing "disappointing results," according to Suffolk Research Service. In the first quarter, Southampton prices fell 8.4 percent, East Hampton prices swooned 30.9 percent, and Southold prices fell 18.5 percent compared with last year, according to Suffolk Research.
The Hamptons luxury real estate market is "supported by Wall Street," Simpson said.
"As long as Wall Street is allowed to lie, cheat and steal they are going to come here and buy homes," Simpson quipped. But, "we are subjected to all those same nationwide trends as the rest of the country."
In another refuge for wealthy New Yorkers 30 miles from midtown Manhattan, luxury homes in Greenwich, Conn., have remained vacant as wealthy buyers receive smaller bonuses in recent months compared to previousy heady years.
"It's not your typical real estate market," said one Hamptons real estate expert, who asked to be unidentified. "People aren't buying homes waiting to get their kids into schools in September, they're buying homes sometimes on impulse and some people are making trophy purchases."
Last year, David Tepper bought the most expensive home in the East End and less than a year later reports from Newsday revealed the financier's plans to tear down the property and build a grander home.
"It's about the dirt. Always is," said one Hamptons real estate broker who asked remain anonymous. "Sometimes it's a magnificent home but most of the time it's the dirt you're buying. At the end of June, five homes in the excess of $15 million will close."
Summer Rentals Likely to be Hot As Always
The increase comes after super luxury sales in the East Hampton Village declined to six homes in the first quarter of 2011 from 17 homes sold in the same quarter last year, according to Town and Country Real Estate.
But, Gianos said the second quarter looks a lot sunnier, not just for home sales, but also for summer rental properties that cost as much as $400,000 for a beachfront property.
"2011 had stronger demand and better pricing for the owner. The rental prices were up," Gianos said. "The Hamptons had a very good Memorial Day weekend. The weather was fabulous, the villages and the stores were very busy. It was a strong weekend."
While real estate brokers wait for the official figures on real estate in the Hamptons, one broker said houses will continue to sell as long as the wealthy are in the market.
"There's a lot of very intelligent people with stupid money," he said. "It's not putting a dent in their wallets and they're willing to spend it."