Hamptons Buyers Shun Oceanfront for Space Amid Zoning Changes

Wealthy homebuyers in the Hamptons are increasingly prioritizing space and privacy over direct oceanfront access, leading to a surge in high-value sales for properties located inland, north of the highway, and on bays. This shift is partly attributed to stricter zoning regulations implemented in late 2024 that significantly reduced maximum home sizes and tied building square footage to lot size.

One notable example is the sale of 29 Wills Point Road in Montauk, a Piero Lissoni-designed spec house on Fort Pond Bay. The 10,000-square-foot, seven-bedroom residence sold for its full asking price of $23 million after just three days on the market, setting a new record for a non-oceanfront home in Montauk. Douglas Elliman broker Kyle Rosko, who handled the sale, noted that demand for such properties is higher than ever, with buyers willing to move away from the ocean to secure more land and privacy.

This trend marks a departure from decades of real estate norms in the Hamptons, where oceanfront properties were the primary target for big-spending buyers. "Over the last five years, sales at or above $20 million were largely those with ocean front views. Beginning last year, we began to see a few $20 million or higher sales north of the highway," said Jonathan Miller, president and CEO of appraisal firm Miller Samuel. He attributed this change to a tight supply at the top of the market and strong Wall Street compensation, though he cautioned that ultra-luxury sales can fluctuate annually.

The East Hampton Town zoning update in late 2024 halved the maximum size for single-family homes from 20,000 to 10,000 square feet and introduced new formulas linking square footage to lot size. Oceanfront properties also face additional regulations from FEMA and coastal commissions, making it increasingly challenging to build large-scale homes directly on the coast. Rosko highlighted that a property like Wills Point, which was permitted before the stricter rules, would be nearly impossible to build on the ocean today.

Buyers seeking sprawling compounds with amenities like barns and tennis courts are finding more opportunities on larger inland parcels. "There's only so much land left," Rosko stated, adding that a "one-of-one location isn’t always the ocean." He is preparing to list another spec mansion north of the highway for $27.5 million, with several other nearby homes reportedly going into contract above $20 million.

Despite this emerging trend, oceanfront properties continue to command premium prices due to their extreme scarcity. Owners rarely build spec homes on the ocean, leading to a limited supply. For instance, an off-market oceanfront home on Beach Lane in Wainscott recently sold for $59 million, up from $45 million in 2021. Rosko is currently marketing a 10,000-square-foot Montauk oceanfront estate for $60 million, which would set a new record for the hamlet, and noted that some off-market oceanfront asking prices have exceeded $275 million.

Miller emphasized that while inland megadeals are a new phenomenon in a niche segment of the market, oceanfront pricing continues to see robust growth. The desire for more expansive living spaces, coupled with regulatory constraints on coastal development, appears to be reshaping the priorities of the wealthiest homebuyers in the Hamptons.