Home prices on Long Island jumped in November as scarce inventory forced buyers into bidding wars.
In Nassau County, the median price climbed to $489,999 last month, an increase of 6.8 percent compared with a year earlier, a new report from the Multiple Listing Service of Long Island shows. Suffolk County home prices rose by 6 percent, to $355,000.
The new report comes as lawmakers in Congress debate the most significant overhaul of the United States tax system since 1986.
Under an agreement in principle between Republican leaders in the House and Senate, the measure reportedly would limit deductions for state and local taxes — including property taxes — to $10,000 and impose a $750,000 limit on mortgage debt whose interest payments qualify for tax deductions. The measure also is said to nearly double the standard deduction, to $12,000 for individuals and $24,000 for families.
Final details of the bill, which could come up for a vote in Congress next week and go to President Donald Trump for his signature by Christmas, have not been released.
Long Island real estate experts have expressed concern that the changes could put a damper on the local housing market, since it removes some tax incentives for homeownership.
If home buyers face new limits on deductions for state and local taxes and mortgage interest, “it’s costlier to buy a home,” said John Rizzo, chief economist with the Long Island Association, the region’s largest business trade group. Sellers, he said, would need to drop prices to make up for the higher tax burden.
But some real estate brokers remain confident that the New York City region’s strong economy and job market, the high bonuses expected on Wall Street and Long Island’s low supply of homes would keep prices from taking a hit despite the potential loss of some tax deductions.
“If the economy keeps going and the stock market keeps going up, it will kind of mute” the impact of the proposed changes, said Gary Baumann, an associate broker with Douglas Elliman in Dix Hills and Port Washington.
Last month, Long Island’s low inventory of homes continued to drive up prices, as demand outpaced supply. The number of homes listed for sale in November was down 7 percent in Nassau and 14 percent in Suffolk compared with November 2016, listing service figures released Thursday show.
However, the pace of sales slowed in Nassau, with buyers closing on about 6 percent fewer sales compared with a year earlier. In Suffolk, the market pace remained essentially unchanged from the previous November, with an increase of 0.1 percent in closed sales.
In both counties, buyers faced a 4.4-month supply of homes for sale, giving sellers the upper hand. In a balanced market, it would take six to eight months to sell all listed homes, brokers say.
In an indication that the market could be unusually busy this holiday season, the number of contract signings increased year-over-year by 3.6 percent in Nassau and 9.4 percent in Suffolk.