Demand for homes in the Hamptons, the Long Island summer retreat of celebrities such as fashion designer Calvin Klein and executives including Goldman Sachs Group Inc. President Lloyd Blankfein, is rebounding.

The average sales price rose 29 percent to an all-time high of $1.1 million in the first quarter, said Dianne Saatchi, a vice president in the East Hampton office of Corcoran Group, the area's largest brokerage. Rentals for the 14-week season that began Memorial Day weekend are as much as $550,000.

Compensation levels on Wall Street are climbing as companies report record profits. Pay for investment bankers is to rise 22 percent on average this year with managing directors earning $1 million, the most since 2000, according to New York consulting firm Johnson Associates.

The Hamptons, about a two-hour drive from Manhattan, offer a haven where year-round homeowners, such as Klein and Hollywood mogul Steven Spielberg, mix with the financial elite, including Blankfein and hedge-fund managers George Soros and Stanley Druckenmiller.

A five-bedroom newly built house that is a two-mile bike ride from Main Beach in East Hampton, home to actress Renee Zellweger and billionaire financier Carl Icahn, is on the market for $1.97 million. A four-bedroom house with half an acre of land in the Springs area of East Hampton, where the town's lower-income residents live, is for sale at $535,000, Saatchi said.

In Bridgehampton, where residents include model Christie Brinkley, it costs $950,000 to buy a one-acre building lot with distant views of the ocean, she said.

Prices in the Hamptons dwarf those paid by most home buyers elsewhere in the nation. According to the National Association of Realtors in Washington, the median selling price of previously owned houses across the nation in April was $176,000, up 7.3 percent from $164,100 in the same month a year earlier.

The demand for home purchases in the Hamptons partly reflects summer rental rates in this popular resort area, said Tony Cerio, a broker with East Hampton Village Realty.

"Someone dropping $50,000 or $60,000 on a summer rental -- that's a down payment on a house, and with interest rates so low now, everyone wants to buy," Cerio said.