Long Island home prices hit record highs last month, as buyers scrambled to win bidding wars for scarce inventory.
In Nassau County, homes sold for a median price of $595,000 in August, up 7.6% from a year earlier, OneKey MLS, the multiple listing service that includes Long Island, reported Tuesday. Suffolk County homes traded for a median price of $456,000, a 10.1% annual increase. Those were the highest sale prices ever reported by the listing service.
The skyrocketing home prices come in the wake of the COVID-19 shutdown, which banned in-person showings by real estate agents from March until June 10. Real estate agents say they have seen a surge of pent-up demand, along with an influx of buyers moving from New York City to the suburbs in search of more spacious homes in less-crowded areas.
Last month, the number of contract signings soared by 45.6% in Nassau and 42.4% in Suffolk, compared with the previous August, the listing service reported.
2 days, 4 offers
The hot market caught the attention of Long Beach resident and real estate broker Sonia Dale, who listed her two-bedroom bungalow last month for $559,000. Dale said she received four offers in two days, and she signed a contract Tuesday to sell the home for $575,000. She had purchased it five years ago for $335,000 and upgraded the interior and backyard herself.
"I wasn't looking to sell ... but money talks," said Dale, 48, who plans to move into a nearby rental. "For me, it was a no-brainer."
Dale's broker was Adam Butter, who is co-owner of Engel & Volkers Long Beach New York with her. Butter said city transplants are especially eager to buy homes near the water.
"There's a wave of people from Manhattan moving onto the Island, and ... if you're going to move to Long Island, why not live by the beach if it's within your means?" Butter said. Prices are rising so quickly that in some cases homes are selling for prices above lenders' appraisals, so buyers need to come up with larger down payments, he said.
Low mortgage rate, high rent
It helps that mortgage rates are so low and rental prices so high, he said. The average home-loan rate was 2.86% last week, a record low, mortgage giant Freddie Mac reported last week. "You could buy right now and pay less than you'd be paying to rent," Butter said.
Low inventory is forcing buyers to compete, with listings down year-over-year by almost 18% in Nassau and 33% in Suffolk, listing service figures show.
Buyers are offering $25,000 or more over the asking price and still losing out, said Angela Prince, owner of Prince & Associates Realty Group in Bay Shore. "Everything is going for above asking, prices are through the roof," she said. "If you don’t have a bidding war, then you’re gravely overpriced."
Even as contract signings soared, home sales plummeted year-over-year by nearly 29% in Nassau and 24.5% in Suffolk, listing service figures show. It typically takes two to three months for a home to go from contract signing to closed sale, so those declines likely reflect the drop in contract signings during the shutdown, brokers said.
In an indication that prices are likely to remain elevated, the listing service reported that the median price of homes that went into contract last month jumped annually by 7.2% in Nassau, to $579,000, and by almost 15% in Suffolk, to $471,000.
Many home sellers are hesitant to list their homes in spite of the hot market, in some cases because they have no place else to go, Prince said. COVID outbreaks in other states, and quarantine rules that make traveling difficult, are prompting some would-be sellers to remain on the sidelines, she said.
"I see no signs of relief for the poor buyers, I feel bad for them," Prince said. The sellers who are ready to move, though, she said, "are doing all right."
CLARIFICATION: An earlier version of this article did not include the fact that Sonia Dale is a real estate broker and co-owner of Engel & Volkers Long Beach New York.
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