Long Island housing market gets boost
Long Island's housing market got a boost last month, as interest rates jumped and the supply of available homes shrank.
Across the Island, prices rose by about 6 percent compared with the previous June, according to a report Monday by the Multiple Listing Service of Long Island. The median price was $425,000 in Nassau County and $340,000 in Suffolk.
The number of homes changing hands ticked up 9 percent in Suffolk County, while Nassau saw a 3 percent bump in transactions.
"We've been in this funk for a long time; it had to end eventually," said Irene Lockel, an associate broker with Netter Real Estate in West Islip. "I actually hear buyers say, 'It's time. We've waited long enough. Rates are starting to go up.' "
Mortgage interest rates rose last week to an average of 4.51 percent for a 30-year fixed-rate loan, according to the most recent report by Freddie Mac. In early May the rate was 3.35 percent. Rates hit a record low of 3.31 percent in November 2012.
The housing market was strongest in the $300,000 to $400,000 price range, as first-time buyers competed for "starter" homes, brokers said.
The number of homes going into contract surged last month compared with the previous June, rising by 21.5 percent in Nassau and 15.8 percent in Suffolk, the listing service reported.
However, mortgage lenders were not as enthusiastic. Many would-be sales were scuttled when appraisals came in lower than the agreed-upon price and the buyer could not get a large enough mortgage loan, real estate agents said.
"The banks apparently are still being cautious," said Marlena Schein, an associate broker with Coldwell Banker Homes Realty in Wantagh. "It's hard for the seller to understand that they can't sell the house for what they want. Everybody's frustrated."
Other hoped-for sales fell apart when buyers were unable to sell their own homes, brokers said. Few homes listed for $700,000 to $1 million are changing hands, Lockel said. As a result, she said, open houses for homes over $1 million are bustling with would-be buyers, "but they're not selling that middle house that they're trying to sell to buy the bigger house."
In both counties, the supply of homes -- as measured by the number of months it would take to sell all listed homes, at the current pace of sales -- was the lowest it has been in at least a year. In June, Nassau had a 7.4-month supply of homes and Suffolk had a 9.6-month supply. A healthy real estate market has a six- to eight-month supply of homes, brokers say.