Sales of existing homes fell 27 percent in July 2010....

Sales of existing homes fell 27 percent in July 2010. (September 2009) Credit: Getty Images

The fever to buy homes cooled in May on Long Island, with a 58.6 percent drop in contracts signed since a key deadline for the federal home buyers tax credit expired April 30, according to data Monday from the Multiple Listing Service of Long Island.

A drop was expected in real estate circles, but May's numbers -- 1,323 contracts compared with 3,196 in April -- reinforced jitters that the housing market might not be able to stand on its own feet once all federal intervention, including low interest rates, is gone. The May figure is also a 34 percent drop from a year ago, when the nation was still in shock over the 2008 Wall Street collapse and subsequent bailouts.

"That's an amazing number," said Tony Chiaravalloti, broker owner of Coldwell Banker Beach West Realty in Long Beach. "It's a big drop."

He said he knew house hunters would take a breather after the April 30 deadline for contracts to be signed, but he expected a drop closer to 30 percent. At Chiaravalloti's agency phones have been ringing less, and it's harder to show homes because there's no deadline pressuring buyers, he said.

"If another financial calamity happens or something shocks the markets," he said, "I think we're in for another downturn again in real estate."

Closings also fell, by 4 percent from April to May, MLS said, but it was a 12.5 percent increase from a year ago, when the tax credit had barely taken hold in the public's consciousness.

The median closing price held firm in May at $350,000 for Long Island and Queens, even though it represented a 4 percent drop from a year ago, the trade group said.

In Suffolk it was $316,500, down from $330,000 a year ago and down from April's $318,000, data show. Nassau's $395,000 median closing price was a slight dip from $390,000 a year ago and an uptick from April's $392,000 figure, MLS said.

Real estate veterans said it might be at least a year or so before the true state of the Island's housing market becomes clear. Until then, they said, prices and closing activity will likely seesaw monthly.

For example, the number of closings this month is expected to jump sharply. June 30 is the deadline for deals to close if buyers want up to $8,000 in tax credits.

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