The Plural Of Anecdotal Is Not Data But With Massive Uncertainty It’s All We’ve Got

June 6, 2025
  • Hamptons Rental Leasing Is Probably Down Due To Robust Sales And Uncertainty
  • Hamptons High End Rentals Are Where The Slow Down Is Concentrated
  • Anecdotal, While Not Hard Data, Is Probably More Useful Than Ever

There was a news headline about a 30% drop in the Hamptons rental market that went viral this week. The rental drop referred to transactions, not prices and seemed to suggest that the rental market was collapsing. I was speaking at a real estate event out there a few days ago and there was a confused look on the faces of agents when I brought up this viral story. I was hoping for a lot of feedback and I got it. The source was a respected local agent, but I am not aware of an actual report with hard data so I can only assume its anecdotal. I scoured the internet and was unsuccessful in locating the source document. Because of the surge of interest in the rental market that resulted, a media outlet approached me for my feedback to go with their write-up about the sales market. I mentioned that the rental leasing collapse story angle did not match what I heard on the ground (so it looks like they didn’t go with that additional story angle).

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Soft Data (Anecdotal) Versus Hard Data

While I don’t publish a formal report on the Hamptons rental market, I do follow it (after all, I’m a dull and boring numbers guy). The rental market out east (East End of Long Island) is chaotic and very opaque. Shared listing data quality is hit or miss on rentals. A local agent I know measured rental leasing activity year over year in their handful of offices said rental volume is down about 10%, and much of that skewed to the very high end of the market. This is anecdotal market feedback.

The agents cited in the CNBC article are top-tier professionals. They are consistent in the point that the amount of rental activity is down, especially at the high end of the market. My disagreement is about the degree of decline without full context. The story conveyed a weakness in the rental market, but the source agent should have described it in the context of a robust purchase market. That’s the context for the story that makes the most sense. The rental activity was pushed later into the season because of the bucketloads of uncertainty from the Tariff Tantrums, bad weather in May, and a late Easter. The blaming of the weather usually induces eye rolls in many markets, and of course, Easter came very late this year, but in a tiny housing market, it does play a role in timing. Another market I track, Palm Beach, which is like Nantucket (I don’t formally track it), has a lot of similarities to the Hamptons. The late Easter kept a lot of people in Palm Beach and Nantucket much later than usual, delaying rental activity and delaying the summer season.

Rental prices have surged since COVID because supply has collapsed due to the strength of the purchase market. Back in the first quarter, Hamptons sales surged annually from near record-low levels by 85.5% while sales inventory only rose by 9.7%, enabling median sales price to crack the $2 million threshold for the first time to a new high. Nuanced story-telling by the source broker was their responsibility in the rental story to avoid market confusion.

One of the reasons rental activity fell was because of the strength of the purchase market. In a period of record high pricing and record Wall Street bonus compensation, homeowners are listing their homes for sale, not rent. The rental story is more about the super high rental market that is slow. Remember that the Hamptons is a tiny housing market with about 1500 sales a year, and 70% of the sales exceed $1 million, with 5% of sales exceeding $10 million.

When piles of uncertainty are layered across the market, it tends to delay everything, which is the point the agents are making. We are now seeing Hampton’s new listing inventory jumped in May just like it did in Manhattan and in Connecticut for example.

Anecdotal Is More Important In Volatile Conditions

For nearly twenty years, I have been interviewed for the Federal Reserve’s Beige Book, an essential anecdotal take on the economy before the hard data arrives – I’m interviewed about every 6.5 weeks (52 weeks/ 8 reports). The Fed is relying on this information even more as a precursor to actual hard data. The problem with the current economy is that the massive volatility, fueled by the Tariff Tantrums, makes it unrealistic to be satisfied with simply waiting for the hard numbers to come out. We are all on the edge of our seats, looking for ways to understand the near-term scenarios.

Key economic inputs like tariff policy are all over the place. A few days ago, I asked the real estate agent audience how many times the presidential administration changed its mind on tariff direction, which is the key source of economic uncertainty right now. The audience’s answers ranged from 2 to 7 times. When I told them it was more than 50, they were blown away, and that answer provided them with more confidence and less uncertainty in explaining why the market pace was cooling.

Zillow Is Telling Buyers What To Offer Without Anecdotal

Things are getting even weirder, Zillow is providing a service on some of their listings relying on their analytics – the same company that blew up their iBuyer company Zillow Offers relying on their Zestimates. Those analytics seem to be in the realm of anecdotal, too.

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Final Thoughts

The real estate industry is scrambling to make sense of the near-term future of the housing market. Anecdotal feedback has become more important than ever but it can be problematic for its lack of proper nuance as we saw with the Hamptons rental leasing story I described earlier. The Washington Tariff Tantrums are still in full swing now, creating maximum economic uncertainty based on a denial or lack of understanding of what a tariff actually does. We have seen at least 50 changes to tariffs since early April, and that’s bad for the housing market, which makes the uncertainty even worse, keeping mortgage rates elevated and causing consumers to take longer to make decisions. The month of May saw listing inventory nearly everywhere in the US rise more than expected as a result. This artificially induced uncertainty is all so silly and unnecessary.

The Actual Final Thought – Skateboard wheels explain May’s inventory pop.

Reporter’s Recognition For Anecdotal And Hard Data Excellence

Since I’ve been covering the Palm Beach housing market, one of the best sources of insights on Palm Beach real estate, whether complex data or anecdotal data, is Darrell Hofheinz, a reporter for The Shiny Sheet. I have learned more about Palm Beach real estate with all its hard data, subtle nuances and anecdotal tidbits from Darrell than from any other source. I’m happy to say he just received a prestigious award for his painstakingly detailed reporting: The Judge James R. Knott Historical Contribution Award by the Historical Society of Palm Beach County. Here’s his acceptance speech transcript. It’s very much worth reading; and of course it’s a good story.

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Did you miss the previous Housing Notes?

June 4, 2025

Calculating Those Calculating Buyers And Sellers

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