Hamptons' sand is turning into gold.
The average sale price for real estate in the ritzy Long Island zip code soared by 40 percent, to $1.7 million, in the first quarter, one of the biggest year-to-year increases in recent history.
Fueled by a continued surge of wealthy vacation-home buyers paying all cash, the number of deals in the first quarter jumped by 52 percent and the median price rose by 19 percent to $880,000, according to a report from Douglas Elliman and Miller Samuel.
The Hamptons has always been a high-priced sandbox for the rich, of course. But the new numbers suggest that even in the high-end home market, eastern Long Island is defying economic gravity.
Among the mansions that sold in the first quarter was a six-bedroom stone and stucco waterfront manor home in North Haven for $31.5 million. The average sale price in North Haven—known for its outsized homes—hit $17.4 million in the first quarter.
A boxy, modern home in Sagaponack, which is not on the water, but has 2.4 acres, sold for $20 million.
"The whole second-home market is very strong right now, and especially the Hamptons," said Dottie Herman, CEO of Douglas Elliman.
Granted the year-to-year numbers were exaggerated somewhat by an artificially low first quarter of 2013. That quarter saw a steep drop in sales and prices after the rush of buying at the end of 2012 as homeowners sought to sell before the increase in capital gains tax rates.
And the $1.7 million average price is still below the $2.1 million peak in the fourth quarter of 2012.
Yet the Hamptons boom stands in stark contrast to the rest of the American housing market, which seems to be slipping into a slump as homes become less affordable to everyday buyers. Like many wealthy, second-home markets, the Hamptons is on a tear, as the growing population of millionaires and billionaires turns to real estate as an alternative investment.