Home prices more than doubled in the Hamptons this year, pushing the median price of a status home up 35 percent to $908,500. The good news for local Realtors is that their commission has gone up accordingly. The bad news is that the Justice Department, perhaps inspired by the SEC’s recent crusade for justice against Goldman Sachs, is now sniffing around asking why the jump occurred, and has sent letters to local brokers asking if the way they marketed the properties had anything to do with it.
Jonathan Lerner, managing director of property broker Engel & Volkers, received one such letter.
The April letter sought documents outlining how brokers disseminate property listings and to whom, Lerner said. “The question I think the Justice Department is asking is: Are they putting their own profits ahead of what they should be doing for the clients?” Lerner said.
Well, if that’s the question they’re asking, we can settle it right now. The answer is of course! This is real estate! Agents have got to put food on the table, and if that means convincing some nouveau riche jerk that buying a McMansion an hour away from their apartment will make them infinitely more fabulous, then they’re going to do what they have to do. The question everyone should be asking is why people are willing to pay such prices for plywood boxes located near narrow strips of sand. But we guess that’s the kind of question that leads you into a housing crash, not out of one.
Hamptons Home Sales Subject of Justice Department Inquiries [Bloomberg]
