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Status Anxiety

Toby Young

Wednesday, 13th August 2008

These days, I can’t even afford to rent a trailer on Shelter Island

As a young man living in New York, I used to club together with four or five friends every summer and rent a house on Shelter Island. About 80 miles from New York, it is close enough to the Hamptons to enjoy a certain social cachet, but not so close that it is overrun with Porsche-driving investment bankers. A favourite bumper sticker on the island reads: ‘SLOW DOWN — You’re Not Off-Island Any More.’

I spent an idyllic summer there in 1999 with the woman who would become my wife and we have often dreamt about returning one day with our children. This year, I decided to bite the bullet and began looking into the cost of renting somewhere for two weeks. Judging from how much I used to pay in the late 1990s, I was hoping to secure a three-bedroom house for around $5,000.

‘You’re joking, right?’ said my ex-flatmate Euan Rellie, a New York-based financial consultant who now owns a house in the Hamptons. ‘Multiply that by four and you might find some barn in the middle of the woods.’

What I had not bargained for was the collapse of the Hamptons real estate market in the wake of the credit crunch. Since the implosion of Bear Stearns in March of this year, few properties in the region have changed hands. According to the local estate agents, the only people looking to buy are bottom-feeders hoping to take advantage of mortgage-defaulters. ‘The worst was one who said, “I know it’s a distressed market — show me somebody who’s bleeding”,’ says a Hamptons real estate broker.

Another broker tells of a Wall Street guy who demanded to see 200 properties in the area and then made offers of 50 cents on the dollar on two or three of them. ‘This isn’t an isolated case,’ the broker says. ‘We call them the undertakers.’ Instead of buying, people have been renting — and the upshot is that rents this year are higher than ever. Sting set a record in 1996 when he rented a mansion in East Hampton for $100,000, but that now seems laughably cheap. ‘You can get a nice house in Bridgehampton with a tennis court for $250,000,’ says Susan Breitenbach, a real estate broker at Corcoran. However, that’s north of Highway 27, the main road that divides the fashionable side of the Hamptons from the unfashionable side. ‘To get the same house south of the highway you need to spend $350,000 to $400,000,’ says Breitenback.

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