Long Island's housing market is showing strength -- with sales up 16 percent last month compared with a year ago -- as buyers seek to close deals before interest rates rise further.
The number of home sales on the Island rose to 2,603 last month, compared to 2,240 in August 2012, the Multiple Listing Service of Long Island reported Friday. The number of contracts signed last month rose year-over-year by nearly 19 percent in Nassau County and 13 percent in Suffolk County.
Prices are also on the rise. The median sales price increased by 8.7 percent in Suffolk County, to $347,750. In Nassau County the median sales price ticked up by 2.3 percent, to $445,000.
Joseph Brewer, 30, who is shopping for a home in southern Nassau County with his fiancée, Stephany Castillo, said that while home prices seem to be rising slightly, they're still fair. The couple now rents a two-bedroom apartment in Oceanside.
"You're getting a house that 10 years ago was worth half a million, and you're getting it now for three-something," he said.
The strong results reinforce the perception that Long Island's housing market is on the mend.
August marked at least the 12th straight month of year-over-year home sales increases and the sixth straight month of price increases in Suffolk County, the listing service reported Friday. Nassau County has seen nine straight months of annual home sales gains, and three months of upticks in prices.
The increase in sales volume was even higher in July, when sales rose more than 20 percent in both Nassau and Suffolk, compared to July 2012.
August is ordinarily a slow month, but not this year, said Barbara Wanamaker, an associate broker with Douglas Elliman in Huntington. In fact, she said, it was the busiest August she's seen in 34 years in the business.
"Everybody was out buying houses," she said. "People wanted to get in before interest rates get higher."
The market was strongest in the $500,000 to $600,000 range, which attracts some first-time home buyers, and slower in the $700,000 to $900,000 range, since those buyers are still having trouble selling their current homes, she said.
The average interest rate for a 30-year fixed-rate mortgage was 4.57 percent this week, Freddie Mac reported. Rates hit a historic low of 3.31 percent in November 2012. In early May the rate was 3.35 percent.
If rates exceed 6 or 7 percent, that could discourage buyers and push prices down, especially at the lower end of the market, Wanamaker said.
Long Island's supply of homes for sale is at its lowest level in at least two years, by one measure.
It would take just under five-and-a-half months to sell all 6,988 homes listed in Nassau County at the current pace of sales, according to a Newsday analysis of data supplied by the listing service. In Suffolk County, it would take almost eight months to sell all 10,271 homes at the current pace of sales.
By contrast, a year ago there was an almost eight-month supply in Nassau and a nearly 11-month supply in Suffolk County.
A healthy housing market has about a six- to eight-month supply, according to brokers.
As prices rise, more families are starting to list their homes on the market and shop for larger properties, said Cynthia McKenna, managing broker of Keller Williams Realty Homes & Estates in Hauppauge. "Move-up buyers are starting to move," she said. "Because of the price increases, they're either not leaving so much behind or maybe they're breaking even, so they're saying now it's time to go."
However, superstorm Sandy still casts a cloud over some areas, such as sections of Lindenhurst, where some storm-ravaged houses remain unrepaired and some homeowners have not yet decided whether to raise their homes, she said.
The damaged homes "are still sitting there because the insurance isn't giving them an answer," McKenna said.