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A lighthouse on the western edge of Fire Island

Every spring for the past few years, Manhattan architect Erik Ajemian has travelled out to the Hamptons to work on residential projects in some of the area’s most affluent towns and villages. Like many architects who operate in New York circles, Ajemian is typically summoned to the eastern end of Long Island by wealthy clients looking to increase their residential footprints in a beachfront retreat well-known for its opulence.

This spring, however, the waterfront property with a generous sun deck and soaring folding glass windows that Ajemian is finishing is not in the Hamptons. Instead, the stately cedar shingle residence is on Fire Island, the slender barrier island 65 miles to the west.

“There’s just an enormous amount of money being spent on property out here compared with years past,” says Ajemian, who has taken on at least three residential projects on the island this summer. “The island isn’t new to investment, but you’re already seeing that increase pretty rapidly this season.”

More than two-and-a-half years after being pounded by Hurricane Sandy, which ravaged hundreds of homes, Fire Island’s property market is recovering, as second-home buyers begin surpassing pre-storm levels.

The 2012 hurricane washed away many sand dunes and beaches on the 32-mile-long island, sparking a wave of rebuilding, including a $200m project by the US Army Corps of Engineers to install a system of 15ft-high dunes and sand berms that it is hoped will protect hundreds of homes.

Estate agents on the island, who suffered one of their worst years in the storm’s wake, say they are now seeing a gradual but steady comeback, with prices in the popular summer retreat again ticking upward and more properties also coming on to the market.

Megan Wallace, a broker with Dana Wallace Real Estate, estimates home sales fell about 30 per cent in the year after Sandy made landfall. She says the pool of buyers dwindled and many residents took damaged properties off the market, fearing lower sale prices. “That led to a shortage of available listings and helped push sales volume way down. But things are getting back to normal in most areas, so we’re seeing much more market activity.”

The number of property sales in the 17 communities that make up Fire Island rose 50 per cent in 2014, compared with a year earlier, according to data compiled by Nicholas Newman, of William J Newman Fire Island Real Estate Brokers. And the average home price rose 3 per cent to $743,929 in that period.

Among areas witnessing the strongest growth are the towns of Fire Island Pines and Cherry Grove, two affluent places with gay communities and a heady mix of small-town American charm and Greenwich Village bohemianism.

Both towns saw a surge of property investment in the 1990s that fuelled a modest building boom along their shores. Today, newly built beach houses mix with clapboard and saltbox homes erected decades ago. Although the average price of a home on Fire Island is about $750,000, an oceanfront property in Fire Island Pines or Cherry Grove can fetch well above $2m.

A three-bedroom waterfront residence in Fire Island Pines is being listed for $3.95m. The contemporary home sits on about a quarter of an acre of land and has a master-bedroom suite, floor-to-ceiling windows and three bathrooms. The property includes separate staff quarters, an infinity pool and hot tub, and is listed with Douglas Elliman.

Farther west along the coast, in Ocean Beach — the largest town on the island — a four-bedroom house with two bathrooms is listed with Dana Wallace for $1.85m. The oceanfront property measures 3,600 sq ft with vaulted hardwood ceilings and hardwood floors. The wood shingle home includes panoramic ocean views.

Three-bedroom waterfront home in Fire Island Pines, $3.95m

The rental market for property on Fire Island is also robust. Homes on the water in towns such as Seaview and Saltaire can be rented for about $80,000 for the summer season, says Joan Woletsky, of Fire Island Sales & Rentals.

“Even when buyers were scarce, the rental market remained strong,” she adds. “There’s always been a summer retreat-like atmosphere here, and that’s popular with renters.”

Despite a real estate rebirth, it will probably take years of rebuilding before Fire Island fully returns to pre-storm form, says CJ Mingolelli, a broker at Douglas Elliman, who has sold residential real estate here for a decade. “There’s plenty of work to do to protect as many homes as possible,” he says.

Because Hurricane Sandy breached the island so severely, many beach houses had to be demolished or moved to replenish dunes washed away in the storm. The US Army Corps of Engineers’ rebuilding project isn’t expected to be completed until 2016, leaving many waterfront properties still vulnerable. And some experts contend that, in a time of rising sea levels, dune restoration will need to continue for years.

“We’ve made a lot of progress since Sandy, but it’ll be a while before we’re back to normal here,” says Mingolelli.

Buying guide

● Fire Island is about 90 minutes’ drive from Manhattan and regular ferries run during the summer months

● Cars can only be driven on the island by special permit holders

● The island, which has 300 year-round residents, features 17 separate communities with about 4,000 homes

What you can buy for . . .

$750,000 A three-bedroom home in Ocean Beach, half a mile from the coast

$1m A four-bedroom house with three bathrooms in Cherry Grove

$3m A four-bedroom, oceanfront property in Fire Island Pines

Photograph: Kenneth C Zirkel/Getty/Vetta

Copyright The Financial Times Limited 2017. All rights reserved.
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