Home to well-known authors, artists and actors, Water Mill offers diverse real estate with a charming community. Water Mill has one of the highest median home prices in New York State. As of 2009, Water Mill was listed as the sixth most expensive Small Town in the United States by Business Week. The median home price was $2,238,66.

In 1644, England gave settlers 40 acres of land near Southampton to build a mill for grinding grain into meal. By the 1800s, the landmarked area was fittingly named Water Mill. Today the hamlet is the only place with a functioning watermill and windmill.