Pending home sales on Long Island jump in May
Pending homes sales shot up last month on Long Island as more people signed contracts to buy homes than a year earlier, the Multiple Listing Service of Long Island said Wednesday.
While the markets in both counties improved, sellers in Suffolk County have more to smile about. On the other side of the transactions, the specter of rising prices and rising interest rates may be spurring buyers to jump into the market.
Pending sales in Suffolk County went up 32.5 percent to 1,365. In Nassau, they rose 21.7 percent to 1,309. Year over year, pending sales have risen every month since December. Sales usually close one to two months after contracts are signed.
"Especially for first-time homeowners, this they feel is their opportunity -- the prices are low compared to what they've been for the last few years and are starting to rise," said Richard Guardino Jr., dean of the Wilbur F. Breslin Center for Real Estate Studies at Hofstra University.
While the improving economy is fueling optimism, with that comes fear that the Federal Reserve may ease off actions that have kept rates low.
"There's a lot of nervousness about whether . . . [the Fed is] going to raise the rates," Guardino said. Mortgage rates "are the lowest they've been in years; the rates are really terrific."
But they are creeping upward, reaching their highest levels last week in more than a year, the Mortgage Bankers Association reported Wednesday. The average contract interest rate for a 30-year fixed rate mortgage of $417,000 or less increased last week to 4.15 percent from 4.07 percent the previous week. The average contract rate is the average rate recorded on mortgage notes during the previous week.
The pace of completed sales rose in Suffolk by 12.1 percent in May to 980, compared with a year earlier. Sales increased slightly in Nassau, rising to 847 from 829, a 2.2 percent increase.
Houses in Suffolk sold for a median price of $315,000, a $12,500 increase, while in Nassau, prices didn't change, holding at a median price of $390,000.
"This past 60 or 90 days the activity has been intense," said Octavius Amen, broker-owner of St. James-based American Real Estate Associates. "The buyers are ready to move on properties that are priced correctly."
Buyers are more conservative in their assessments of what they can afford, compared with the boom years when banks were more lenient, he said.
Residential inventory -- the number of homes available for sale -- fell to 23,409 in May, a 22.1 percent drop from a year earlier in the combined area of Nassau, Suffolk and Queens.