Anyone who has lived in Manhattan knows that this is an important weekend. Memorial Day weekend marks the official beginning the summer, which in past years has meant an exodus of New York City's rich, powerful and famous residents to the Hamptons. This summer, however, the crowd will look different -- a lot richer.
CNN reports that the current recession has "cooled off" the Hamptons as a summer vacation spot. That's basically right, but the precise phenomenon is a little different than the effect the recession will have on most other summer vacation destinations. This year, those who can still afford to venture to the Hamptons might be confused that their Mercedes got them there, instead of a DeLorean equip with a flux capacitor. It's going to resemble the good old days.
Since the late 1990s, a lot of "new wealth" had been created. Those newly minted fortunes swelled the population of New Yorkers believing they too were entitled to enjoy the summer's playground for the rich towards the tip of Long Island. Of course, that was before the current recession.
But this is not just any recession: it has hit New York City's wealthy very hard. In particular, bankers, lawyers and others would consistently rely on lofty six- or seven-figure bonuses to finance a beach house or cottage in the Hamptons. Most of those huge bonuses have disappeared, and for many so have the associated jobs.
Take, for example, this prototypical story from an article in AOL's Daily Finance:
Salvatore "Seve" Morano of Bronxville, NY, is one example of the reduced demand in the Hamptons. Morano had rented beach houses in trendy East Hampton for the past 5 years, often paying about $5,000 to $7,000 per month for a house-share with five or six roommates. But a very low bonus in December 2008 and other cutbacks at the Manhattan architecture and design firm where he works have put him in a lower price category, summer resort-wise.
"This year, the numbers just didn't add up for a $20,000 summer expense," Morano told DailyFinance. "It would have meant cutbacks in other areas, so we decided to rent a cottage for just one month on the South Jersey Shore for considerably less."
"Seve" is surely not alone. In fact, I would argue he's luckier than many -- his bonus might be smaller, but at least he still has a job.
But for the ultra, filthy, stinkin' rich, the Hamptons will be party-as-usual. As this Newsday real estate blog piece explains, the extremely high-end properties in the Hamptons are doing just fine, and only a handful are still available.
Despite the economy, there are still folks who can afford to spend in the high six figures on a Hamptons rental. A 6.64-acre beachfront property in Sagaponack recently rented for the full asking price of $900,000 for Memorial Day to Labor Day, says listing agent Beate Moore of Sotheby's International Realty.
This just goes to show that you can't keep a good super-rich person down. They'll continue to enjoy the Hamptons, just like they have for decades, and probably West Egg as in F. Scott Fitzgerald's The Great Gatsby before that. But for those whose sudden wealth has been destroyed by the collapse of the real estate and financial markets -- for the Seve's of New York -- a shorter stint on the Jersey Shore will have to do.