Sandy dampens otherwise bright LI housing picture

Sally Budde, of Amityville, is selling her four-bedroom Sally Budde, of Amityville, is selling her four-bedroom Victorian home. (Oct. 22, 2013) Photo Credit: Jessica Rotkiewicz

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Long Island's housing market is reaching heights last seen in 2008, but on the South Shore prices have fallen due to the lingering impact of superstorm Sandy.

The median home price on the Island, not including the East End, was $380,000 in the July-through-September period -- a 4.1 percent gain over the third quarter of 2012, and the highest price since fall 2008, when the typical home sold for $415,000, according to a report to be released Thursday by the appraisal firm Miller Samuel and the brokerage Douglas Elliman.

People are "feeling better about the economy," said Dottie Herman, chief executive of Douglas Elliman. Plus, she said, the recent rise in interest rates "pushes people to act."

On the South Shore, though, prices dropped. Along Nassau County's southern coast, which bore the brunt of the Oct. 29 superstorm, the median home price dipped year-over-year by 1.3 percent, to $385,000. On Suffolk's South Shore, the median home price declined by 1.8 percent, to $280,000.

The number of sales rose by 22 percent along Nassau's South Shore, to 944, and by 36 percent on Suffolk's South Shore, to 929.

The lower median price on the South Shore "reflects the reduction in prices on houses that were sold as is, storm-damaged," said Jerry O'Neill, owner of Coldwell Banker Harbor Light in Amity Harbor.

Home buyers seem to expect a discount even for unscathed properties, said Sally Budde, who listed her renovated four-bedroom Victorian home in Amityville in May for $542,000. She recently dropped the price to $519,999. The home was not damaged by the storm, she said.

"It's a little frustrating," she said.

The overall rise in prices and sales across the Island reflects a mix of factors, from rising mortgage rates to low numbers of homes for sale, said Jonathan Miller, chief executive of Miller Samuel.

Not including the East End, Long Islanders sold 6,977 homes last quarter -- the most since the third quarter of 2006, the report found.

In the Hamptons, 534 homes changed hands, nearly 32 percent more than a year before. The median price was $768,000 last quarter, a year-over-year gain of 0.4 percent. On the North Fork over the same period, the number of sales fell by 3.2 percent, to 151, and the median price dropped by 2.1 percent, to $410,000.

Mortgage rates that are low by historic standards, but increasing since May, have prompted many families to buy "before rates rise further," Miller said. Last week, the average rate for a 30-year fixed-rate mortgage was 4.28 percent. Rates hit a historic low of 3.31 percent last November.

In addition, Miller said, many homeowners who would like to trade up are stymied by strict credit standards or low home equity, so they have not listed their own properties. Inventory was near its lowest in 10 years, with 15,652 listings, down 13.5 percent from a year before, the report found.

On the South Shore, Sandy caused a temporary lull in home sales, followed by an artificial spike last quarter, Miller said.

It will likely take another year for prices on the South Shore to recover, and that's if there are no more major storms and no spike in flood insurance rates, Herman said. In Long Beach, which was especially hard-hit, it could take a year and a half, she said. But she said she believes the region will bounce back.

"People that love the water, love the water," she said. "Most people aren't going to be scared off by it as long as the insurance rates don't go crazy."

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