Long Island home prices jumped last month as buyers competed for the lowest supply of homes in at least five years.
In Suffolk County, homes sold for a median price of $365,000 in December, a 9 percent increase from a year earlier, the Multiple Listing Service of Long Island reported Thursday.
Nassau County home values rose by 6.4 percent, to a median price of $499,000.
Inventory fell sharply in both counties last month. There were 5,554 homes listed for sale in Suffolk, down 13.4 percent from the previous December. In Nassau there were 3,780 listings, a year-over-year decline of 5.7 percent.
That’s the smallest number of listings since at least December 2012, listing service figures show.
The number of closed home sales fell last month by 2.1 percent in Suffolk and 8.6 percent in Nassau, compared with December 2016. At that selling pace it would take less than four months to sell all listed homes. A balanced market has a six- to eight-month supply, brokers say.
With homes so scarce, “it’s definitely a seller’s market,” said Michael Mendicino, owner of Millennium Homes in Bay Shore and president of the listing service.
The fierce competition for homes has driven many buyers to continue looking right through the holidays and into January, traditionally a slow time for the housing market, said Barbara Wanamaker, owner of Prime Properties Long Island in Huntington.
“The houses that are in really good shape get multiple offers,” she said.
The massive federal tax overhaul enacted last month could be good for Long Island’s economy — and therefore its housing market — if it helps create more jobs and gives residents more spending money, brokers said.
However, brokers said the impact of one provision — a new $10,000 cap on federal deductions for state and local taxes, including property tax — could have a mixed impact on Long Island.
Demand is likely to rise for homes with low or moderate property taxes, but buyers could seek discounts for homes with higher taxes, brokers said.
Even before the tax overhaul, price-conscious buyers were steering away from large homes in high-tax communities such as Lloyd Harbor, and the new limit on tax deductions could accelerate that trend, putting downward pressure on prices, Wanamaker said.
But Mendicino predicted the impact would be temporary.
“People who are accustomed to buying luxury items are still going to buy luxury items,” he said. “Someone who’s used to buying a Maserati is still going to buy a Maserati, no matter the tax consequences.”