Long Island’s real estate market has gone wild during the pandemic, with luxury homes that once languished on the market suddenly sparking bidding wars, and some first-time homebuyers scrambling to make offers of $30,000 or more over asking prices.
Rock-bottom interest rates, a shortage of homes for sale and a sudden influx of buyers leaving New York City in search of more spacious suburban properties get most of the credit – or blame, from buyers’ perspective – for the skyrocketing prices, real estate agents said.
"If something comes on [the market] it’s gone immediately," said Ann Conroy, CEO of Douglas Elliman’s Long Island division. "There are more buyers than there are sellers at this point, and interest rates are extraordinarily low." The average mortgage rate was 3.13% last week, mortgage giant Freddie Mac reported.
Demand is especially fierce for homes with plenty of space for remote work and school, along with land where children can play and adults can entertain safely, she said.
The surge of buyers leaving the city drove up the median home price on Long Island, outside of the East End, to a record high of $525,000 in the last three months of 2020, up 15.4% from a year earlier, Douglas Elliman and the appraisal company Miller Samuel said in their most recent report on the region.
The gains have not been evenly distributed, though, the companies reported. In Locust Valley, for instance, the median home price nearly doubled in a year, from $569,000 in the last three months of 2019 to more than $1 million in the same period last year.
In scores of other Long Island communities, bidding wars drove prices up by margins that were less eye-popping but still dramatic, generally ranging from about 10% to 30%. And in some communities, the median price dropped over that period.
The local upswings or downturns in median prices were partially due to changes in the types of homes that sold, said Jonathan Miller, president and CEO of Miller Samuel. And in some affluent communities, sales of the highest-priced homes had been sluggish for several years, so the pandemic price gains look especially sharp, he said.
Now that vaccines are becoming more widely available, it’s likely that homeowners will feel more comfortable putting their houses on the market, and the increased supply could help ease competition among buyers, he said.
"That reduces one of the limitations on supply," he said, "which is sellers not being willing to let strangers walk through their homes."
Here is a closer look at six Long Island communities where prices have risen during the pandemic, according to the most recent available figures from Miller Samuel and Douglas Elliman. Use the searchable community-by-community chart to see how prices changed across Long Island.
Locust Valley home prices have skyrocketed during the pandemic, selling for a median price of $1,037,500 in the last three months of 2020, a staggering 82% leap from a year earlier, among the biggest gains on Long Island, Miller Samuel and Douglas Elliman reported.
The dramatic increase was due in part to a few big-ticket transactions such as a five-acre waterfront estate that sold for $7.5 million in December, as well as an influx of New York City residents seeking three- or four-bedroom houses within walking distance of Locust Valley’s downtown, brokers said.
Locust Valley is among the Gold Coast communities viewed as a safe haven during the pandemic, as affluent buyers sought out outdoor amenities such as beaches and country clubs, along with private and public schools, downtown shops and eateries and easy access to highways, said Regina Rogers, a real estate agent with Douglas Elliman in Locust Valley.
Some city residents are purchasing second homes in Locust Valley "as a Hamptons alternative," Rogers said. "Those in particular with pools were snatched up immediately."
In Locust Valley’s entry-level market – up to about $1 million – homes typically have seen price increases of about $100,000 during the pandemic, Rogers said.
A recent search of listings turned up roughly a dozen homes in Locust Valley priced under $1 million. There were about the same number over $1 million, including a 32-acre estate with a seven-bedroom historic mansion where F. Scott Fitzgerald and his wife Zelda were said to have attended parties, along with an eight-car garage, pool, horse stables and farm, listed for $28.5 million.
Buyer interest remains strong this spring, and inventory is "extremely low," Rogers said.
A convenient location, spruced-up downtown and family ties are attracting buyers to Westbury, where the median home price rose by 19% year-over-year to $590,000 in the fourth quarter of 2020, Miller Samuel and Douglas Elliman figures show.
The village is close to highways, beaches and shopping malls, and its downtown shops and restaurants and Long Island Rail Road station appeal to buyers too, real estate agents said. The village is using a $10 million state grant to revitalize its downtown.
"I’ve seen the transition," said Hector Castillo, of Exit Realty Metro in Syosset, who has been visiting Westbury since the 1970s. "The town is investing quite a bit of money."
Many buyers are moving from Queens, Brooklyn or Manhattan, said Ramon Bonilla, a real estate agent with Platinum Winners in Westbury. In some cases, their homes have risen in value, and they’re trading up to more spacious houses with backyards, he said.
"People in Queens, they have these homes that are worth a million dollars and they don't have a backyard," Bonilla said.
The biggest attraction for some buyers is relatives who already live in Westbury, Castillo said. For them, he said, "it's mainly because of family."
In Freeport, prices have jumped by 15% year-over-year, to a median $450,000 in the last three months of 2020, according to Miller Samuel and Douglas Elliman. The coastal community is drawing buyers who enjoy the restaurants and shops along the waterfront Nautical Mile, as well as the nearby beaches and easy access to highways, said Francheska Gomez, a real estate agent with Fave Realty in Freeport.
Homes in northern Freeport – outside of flood zones, where flood insurance premiums can be costly – have seen some of the biggest price increases, she said.
Every time a buyer makes an offer to purchase a home, she said, "you'll see definitely three or four or even 10, 12 offers behind yours." In some cases, buyers are offering $10,000 to $30,000 or even more over the asking price, reasoning that low mortgage rates are offsetting the high prices, she said.
"If the interest rates are low, people are willing to pay that extra dollar to get their dream home," Gomez said.
Melissa Taveras, 32, an accountant who lives in a two-bedroom apartment in the Woodhaven section of Queens, said she is hoping to find a four-bedroom home priced under $700,000 in Freeport or another South Shore community where she can be close to the beach and have enough room for out-of-town relatives to stay over.
"Working from home for a year, that’s when you realize, ‘yeah, I need more space,’" said Taveras, who worked remotely until last month, when she resumed commuting to her job at a power plant in the Astoria section of Queens. She said she has made offers on three homes but was outbid each time.
House-hunting during the pandemic requires patience, especially when buyers must wait in line for individual tours at open houses, due to social distancing rules.
"You wait half an hour to see a house for two minutes," Taveras said with a laugh. "But it’s OK, it’s part of the experience."
In Stony Brook, homes sold for a median price of $530,000 in the last quarter of 2020, up 18% from a year earlier, Miller Samuel and Douglas Elliman reported.
A surge of interest among buyers and a shortage of homes for sale is leading to bidding wars, said Mary Van Tuyl, a real estate agent with Daniel Gale Sotheby’s International Realty in Stony Brook.
"It's the same thing as when you went out to go buy a Furby for your kids," she said. "Of course supply and demand is going to have an effect."
The hamlet’s parks, village center and spacious homes with plenty of room for remote work and school, and even for live-in grandparents, are among its appeals to buyers, Van Tuyl said.
"People are looking more into houses that don't have the full open floor plan, they’re looking for areas where they could separate themselves," Van Tuyl said.
Among the homes on the market in Stony Brook is a five-bedroom, four-level house on two acres listed for $889,000. Melissa Courtney, 50, whose late parents had owned the home since the 1960s, said she and her five siblings grew up splashing in the 50-foot pool, biking through the woods and playing sports and flashlight tag on the grounds her mother landscaped with stones collected by the kids.
Courtney, who is staying in the home while the condominium she recently purchased in Baiting Hollow is being renovated, said she envisions children running free on the property as she and her brothers and sisters once did: "It’s such a lovely yard and growing up that's all we did, we were outside, we could walk down to the village, no problem."
The variety of housing in Medford is drawing in buyers seeking everything from houses priced for first-time homeowners to condominiums to higher-end newly built houses.
Medford’s median home price has increased by nearly 18% year-over-year, to $397,500 in the fourth quarter of 2020, Douglas Elliman and Miller Samuel figures show.
Lina Lopes, an associate broker with Douglas Elliman in Farmingville, said the price gains and competition among buyers have been a boon to many home sellers – including one client who is a single mom, who walked away from a home sale with a little cash, instead of having to sell for less than the amount owed on her mortgage, as she had feared – but they’re posing challenges for purchasers.
"We have had some buyers say they want to just take a little break, because it's exhausting," she said. "They go through maybe 10 or 15 offers before they have one accepted." Buyers, she said, "wind up realizing if they don't come in at least $30,000 or $40,000 over [the asking price] they're not even in the ballgame. That's pretty sad."
But with interest rates so low, she said, buying is still "much better than renting, rentals are through the roof."
Investors, though, are finding that prices have risen so sharply that it’s hard to find a home that’s worth purchasing, renovating and reselling, she said: "Their margin is too small, it doesn’t make sense."
Lindenhurst has seen an influx of buyers attracted by its waterfront parks, marina, a revitalized downtown and room for remote work.
Homes sold for a median price of $436,749 in the last three months of 2020, up 15% from a year ago, Miller Samuel and Douglas Elliman reported.
Many buyers are moving from Brooklyn and Queens, said Frank DellAccio, broker and owner of Century 21 AA Realty in Lindenhurst.
"We've got folks who have realized that the current housing that they have is inadequate to work remotely," he said. "They've got kids running around, or the dog is barking, and they realize they can't conduct their business that way, and it appears many businesses are going to continue with remote working, at least to some level."
Lindenhurst’s restaurants and breweries are among the appeals, he said: "That's what I hear from the buyers, they like the whole feel…that vibe of downtown."
Plus, he said, "the millennials have come of age…. They have gotten to the point where their incomes are more consistent and stable, they have saved up their money for whatever down payment they need."