Home prices reached a new high in Suffolk County and matched a previous record in Nassau County last month, a new report shows.
The median home price jumped to $535,000 in Suffolk last month, an increase of 17.6% compared with a year earlier, OneKey MLS, the listing service that includes Long Island, said in a report released Monday. Nassau home prices increased by nearly 13% annually, to $670,000, the service reported.
The rising prices indicate sellers still have the upper hand in Long Island’s housing market. With the supply of listings down by 26% compared with August 2020, it would take two months to sell all the homes listed in Suffolk and 2.5 months in Nassau, at last month's pace of pending sales, listing service figures show. A balanced market has a five- to eight-month supply, brokers say.
Price increases have been fueled in part by buyers seeking to lock in record-low interest rates, which has caused more competition for entry-level and mid-priced homes, brokers say. In addition, during the pandemic large numbers of city residents have gotten into bidding wars for suburban houses with outdoor space and room for remote work and school.
What to know
- The Suffolk median home price hit a new high of $535,000 last month, up 17.6% from last year.
- In Nassau, the median home price was $670,000 in August, up 13% annually.
- It's a sellers' market, with a very limited supply of homes for sale.
- Buyers could get relief soon though. For homes going into contract, prices dipped in August, compared with the previous month. The market "is cooling down," one expert said.
Buyers could get some relief from rising prices soon, though. For homes that went into contract last month, the median price in Suffolk was $520,000 in August, down 3.5% from the previous month. In Nassau, homes went into contract last month for a median price of $650,000, down 0.76% from July, OneKey figures show.
"It does look like the market is cooling down," said Jim Speer, CEO of OneKey MLS. "You do reach the upper limit of what people are willing to pay, and we may be reaching that, or have reached it."
Some sellers are still fielding multiple offers, Speer said, but "you don't hear of the five, 10, 20 offers on homes."
Real estate brokers echoed that viewpoint. Long Island's housing market "is not what it was before," real estate broker Jeewan Persaud said. "Before, you used to have [lines] at these open houses, it was so competitive. You had people going crazy."
Now, he said, there are fewer buyers "and they're very, very picky."
Not all sellers have caught on to the new market conditions, he said. Some hopeful sellers, he said, "just throw a price out there without much comparative analysis, and some get the price and some do not."
Despite the shift in market conditions, buyers remained active, signing contracts last month to buy 1,801 homes in Suffolk, up 3.6% from July, OneKey reported. In Nassau, 1,438 homes went into contract last month, up 1.6% from July, listing service figures show.
Persaud predicted that prices could fall over the next year or so, especially if lenders foreclose on large numbers of homes once New York's foreclosure moratorium ends. The ban on evictions and foreclosures has been extended several times over the course of the pandemic, most recently until Jan. 15. Once that ends, he said, "I'm thinking that will drive prices down."
Speer disagreed, saying he expects a relatively small number of homes to end up in foreclosure. Rising property values have given homeowners more equity that will help protect them from foreclosure, he predicted. "I think it's going to have very little impact on the market," he said.
Plus, he said, low interest rates and a shortage of homes for sale are likely to keep prices stable. The average mortgage rate was 2.88% last week, mortgage giant Freddie Mac reported.
With home prices apparently leveling off, Speer said, "it just looks like we'll probably just stay steady as we go."