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But the general market in the multimillions to the very top is unique. Other than prime waterfront properties—and I mean the very best class of those—the rest are likely being offered at a discount relative to recent times. Today's $6 million house was $7.5 million last year. Today's $4 million house north of the highway can probably be had for $3 million. How much of a discount can anyone expect?
Prices above $10 million are also looking like good buys. The hitch: Do you wait and hope to get such a house for $8 million, or settle on $9 million? As the buyer, you've still made a home run—and you will be very happy years from now when the property you have purchased has appreciated at an annualized rate of 15 percent or more.
Of course, perennial pragmatics rub their hairy hands in glee extolling every opportunity as being "too soon, not enough blood yet." You see them year after year in rental houses, damning the landlords who are charging Four Seasons prices for their Comfort Inn amenities.
No doubt, some who bought a Hamptons residence a year or two ago and want to sell now are feeling pinched. If you bought five years ago, then you're probably sitting pretty.
What's happened to markets like the Hamptons is that buyers approach properties not as residential domiciles but rather as investments. You've got to buy right, the thinking goes. It's an investment, not a place to hang your hat or raise a family. Buyers of Hamptons real estate have to accept the fact that most sellers are fairly well heeled, that economic ruin is not necessarily a household state of being.
When prices are under pressure, it becomes a buyer's market, though, at any part of the cycle. Whether the actual discount is five percent or 30 percent is immaterial. The point is you shouldn't miss the opportunity to take advantage of weakness, which doesn't happen all that often in any given cycle.
Maybe our specialized housing market—or any housing market for that matter—needs a risk management approach. On Wall Street and in corporate America, risk management is a very big deal. What are the risks—the level of high reward versus the level of loss—in following a particular investment or business venture?