New development in the Hamptons used to conjure up images of lavish houses popping up in the middle of potato fields. But as more farms and vacant land are being preserved as open space, ever fewer lots are available to build new homes. And with soaring land values, coveted beachfront locations already built on and surging demand for new and bigger houses with copious amenities, teardowns in the area have become more pervasive than ever.

But what qualifies as a teardown on the South Fork might raise eyebrows elsewhere.

To make room for the 11,600-square-foot house that James Michael Howard, a developer and interior designer, finished earlier this month in Bridgehampton, he first had to tear down the four-bedroom, three-bath 1980 house on its 1.1-acre lot. Mr. Howard paid $3.7 million for the shingle-style house, formerly owned by the “Manchester by the Sea” director Kenneth Lonergan and his wife, J. Smith-Cameron, and built the larger home on speculation.

The fanciful new seven-bedroom, nine-bath house that Mr. Howard designed, in collaboration with the architects Bobby McAlpine and Greg Tankersley, has 30-foot ceilings with exposed beams, a breakfast nook that seats 10, a 16-seat lower-level theater, a heated in-ground pool and a pool house. Art-filled and fully furnished — down to the candlesticks in the dining room and the books on the cocktail tables — it is on the market for $11,950,000.