"Those great big huge houses from the 1990s and early 2000s, they're sitting," Paul Brennan, a broker at Douglas Elliman Real Estate, told Bloomberg's James Tarmy. "I think that conspicuous consumption isn't in vogue these days, and that's why bigger isn't better."
The shift away from ultra-luxury is hurting the richest homeowners.
Rather than sprawling estates that are difficult to maintain, today's buyers prefer vacation homes that are relaxing. That means fewer lawns, gardens, tennis courts, and rooms to maintain.
At least one celebrity has fallen prey to the trend. Matt Lauer's 25-acre Hamptons estate recently got a $2 million price chop and has languished on the market for more than a year.
The end of 2016 was challenging for the Hamptons luxury real-estate market, according to several brokerages that released reports. Data from the luxury real-estate company Brown Harris Stevens showed that average home prices had fallen by 23.1% in the fourth quarter year-over-year.
Mark Sagliocco/Getty Images for Hamptons Magazine Young buyers are shifting away from conspicuous consumption.
In the second quarter, 48 homes that cost $5 million or more sold a vast improvement compared with the past year and a half, according to Bloomberg.
Experts blamed the election for the previous downturn.
"This was really due to the election," Aspasia Comnas, executive managing director of Brown Harris Stevens of the Hamptons, told Business Insider's Madeline Stone. "We're a secondary-home market, and if our buyers or sellers feel at all uncertain about what their economic future will look like - and with a change in administration, there was no way but for there to be a change in the economy - buyers and sellers hold back."
The Hamptons market has also been hurt by the growing popularity of the Hudson Valley, which has renowned hiking and food scenes.
Madeline Stone contributed to this story.