CNBC's Robert Frank joins 'Squawk on the Street' to discuss why rentals in the Hamptons are piling up.

The Hamptons

The Hamptons summer rental market is experiencing a notable slowdown, with rentals down 30% compared to the previous year. Between 4,000 and 5,000 homes remain available, and some high-end brokers report business is down by more than 50%. Homeowners are reducing rents by 10 to 20 percent in response to the increased supply and slower demand.

Brokers attribute the decline to factors such as colder weather, delayed vacation planning, and economic uncertainty, which is prompting even affluent renters to be more cautious. While the sales market in the Hamptons remains strong, with the median sales price exceeding two million dollars, the rental market is facing challenges, particularly among those who traditionally rent rather than buy.

Hamptons summer rentals down 30% compared to last year

summer rentals in the Hamptons are cooling off. Robert Frank is here. He's got that story for us, Robert. Yeah, bargains in the Hamptons, bargains all being a relative term when you're talking about the Hamptons. And that's because Hamptons rentals are down 30% compared to last year. Discounts and unrented beach homes are piling up by the day. There are now between four and 5000 homes still available. If you go on those websites for monthly or seasonal rentals. Now, some high end brokers, those are the folks who rent the big beachfront homes. They say their business is off more than 50%. So why is this? Well, brokers blame blame the cold weather. They say a lot of families may be taking time to make summer plans or they're holding out for bargains in a market that has become very expensive. They say rentals will all be back by July. But some fear all this market volatility, the economic headlines are causing even the affluent to pull back a little bit on their summer spending. Now, homeowners are cutting rents already by 10 to 20 percent. So what do you get for your money out east? Well, this four bedroom waterfront in Bridgehampton, they were asking four hundred twenty five thousand dollars for the summer. Fifty thousand dollar price cut on that with the option of just renting for July or August. If you're on a smaller budget. Well, this four bedroom in East Hampton with a saltwater pool, David, you'd like that one available for forty thousand dollars for August or by now. Fifteen thousand dollars just for June. Who knows what the weather will look like in June? Hopefully a little bit better for more on the entire summer summer rentals market, including in Aspen, Nantucket, all over the country. Check out the Inside Wealth newsletter at CNBC dot com slash inside. Well, CNBC dot com slash inside. Well, it wasn't a big enough pool. You need a lot of big lights near the water. You can go in the ocean, but that's not a bad. You know, it is. Are they realistic in expecting that once the weather improves, things will improve? So this is the big question in the Hamptons right now. Is this just late, late comers that people will finally pour in? Or is this a crisis? Did people really make either other plans or they're just not spending big? My sense is it may be a little bit of both. I hear the very wealthy are either they either own in the Hamptons or they're buying or they're in Europe this year. Europe as a as a relative price proposition is so much better than the U.S. right now. I mean, Greece, Italy, Spain, south of France, very popular. And I think when you get lower down on the wealth ladder for those, let's say, just affluent who are renting for the summer, I think they're very price sensitive right now. I think they're very sensitive to what's happening in the markets, in the job market, in finance, in New York, where there's a lot of volatility. So I think some people may be holding off. But it hasn't influenced yet the overall home prices in the area. The sales market is is strong. Sales were down a bit in the first quarter just because there's very little inventory. But for the first time, the median sales price in the Hamptons top two million dollars. So that shows that there is demand there for price for homes that are quality, that are well priced on the sales side. And again, I think that's why the very wealthy are still wanting to be there and spending. But it's that affluent side. But yes, the sales side has been strong when there's product. Is that skewed the price part by the ultra high end and the degree to which hedge funds have moved in? Absolutely. There was a 70 million dollar purchase in East Hampton in the first quarter. I mean, median is less affected than the average sale price. But still, yes, a lot of the sales out there are at the very high end. And there's there's a lot of product people building new homes. Why would you rent for four hundred thousand dollars when you can just buy? There are many rentals out there for two million dollars a month. Really? And by the way, wouldn't you rather own something? And by the way, those those are the ones that have typically totally rented out for the summer. There's several right now listed at either one or two million dollars a month. And by the way, they're always rented those properties and they're not this year. They're about six or seven of them that are in the seven figures per month. Maybe they're still available. Some of those people have bought perhaps, to Sarah's point, because you do have a lot of hedge fund managers now who've moved out of New York. They live in Florida and then they come back up here for the very warm months. That's right. They don't. They're no longer New York residents, but they still summer in the Hamptons because nobody wants to be in Florida in the summer. As they quickly learn. Yes, they did learn that. Robert, thanks. Thank you, guys. Robert, Frank. When we come back, Fundstrat's Tom Lee. Some top picks amid the volatility.

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