Tags: Hamptons | rental | stock | Colas

ConvergEx's Colas: Is Hamptons Rental Demand the New Stock Market Indicator?

Friday, 24 May 2013 08:00 AM

By Dan Weil

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Phenomena as obscure as Super Bowl outcomes and hemlines have been used to ordain the direction of the stock market. Could demand for Hamptons rentals be the next one?

The Hamptons are a portion of Long Island, where many wealthy New Yorkers head for long weekends during the summer.

The current "white hot" market for Hamptons summer rentals shows hedge fund managers feel confident about the stock market, Nicholas Colas, chief market strategist for ConvergEx, writes in a commentary obtained by CNBC.

Editor's Note:
How to Pay Zero Taxes . . . Legally

"There are some 70 listings in the [$500,000] to $900,000 range for the traditional Memorial Day- to-Labor Day period in the better parts of the East End," Colas says.

"Think a lot of hedgies are anticipating a volatile summer while paying those prices to 'Chill Out East'? Probably not."

The recent decrease in the Chicago Board Options Exchange Market Volatility Index (VIX) demonstrates that "expectations are out there for a very quiet summer," Colas writes. The index has dropped 23 percent so far this year and 39 percent in the last 12 months.

The rental market in the Hamptons "is much stronger than it has been in the past, in the high end especially. There's not too many homes left." Corcoran broker Susan Breitenbach, tells CNBC.

Breitenbach notes that in recent years, "people were a bit stressed out because of the economy in general," she said, "but now they're more comfortable."

Speaking of bizarre indicators, how about underwear sales? While U.S. men’s apparel sales rose just 1 percent last year overall, underwear sales surged 13 percent, according to a study by market researcher NPD Group, MarketWatch reports.

“Men are updating the basics of their wardrobe,” says Marshal Cohen, chief industry analyst at NPD.

Perhaps that bodes well for overall consumer spending, which accounts for about 70 percent of the economy, MarketWatch speculates.

Editor's Note:
How to Pay Zero Taxes . . . Legally

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