Home prices rose faster in Suffolk than in Nassau last month, as budget-conscious buyers sought bargains farther east.
In Suffolk County, the median home price was $330,000 in February, 4.9 percent higher than a year earlier, the Multiple Listing Service of Long Island reported Monday.
The gains were more modest in Nassau County, where the median price increased year-over-year by 2.3 percent, to $450,000.
The number of closed home sales fell slightly in Suffolk, dropping 0.8 percent compared with a year earlier. In Nassau County, sales dropped by 7.4 percent annually.
In another indication of Suffolk’s growing popularity, the number of contract signings increased annually by almost 15 percent in Suffolk, and by 3.3 percent in Nassau.
Suffolk’s lower cost of living — including more affordable property taxes — is prompting many buyers to cross the county border, said Jean-Paul Commisso, manager of Cornerstone Real Estate Services in Smithtown.
Homes within a 60- to 75-minute commute to Manhattan are especially in demand, he said.
“The common theme is good school districts, as close to the city as possible,” he said.
Many buyers are feeling optimistic about their financial prospects, said Cynthia McKenna, managing broker at Keller Williams Realty in Hauppauge.
“The markets are getting better, the stock market and everything else,” she said.
Even so, the slow, steady gains in home values — February marked the eighth straight month of year-over-year increases in Suffolk, and the 18th in Nassau — still haven’t driven prices back up to their pre-recession levels. In mid-2007, median home prices peaked at $420,000 in Suffolk and $502,500 in Nassau.
In some cases, frustrated homeowners have decided to stay and renovate their homes, instead of selling for what they see as unacceptably low prices, McKenna said.
Demand remains strong despite the scarce supply of homes, brokers said.
Last month, 11,348 homes were listed for sale on Long Island, 20 percent fewer than a year before, listing service figures show.
“You have more bidding wars because there’s only one or two open houses” that each buyer is interested in, Commiso said. “Contracts are being drawn up on Mondays after Sunday open houses. Especially starter homes, $300,000 to $500,000, in good school districts.”
Rising interest rates — and a widespread belief that rates will keep increasing this year — are motivating buyers to strike deals, since higher borrowing costs reduce buying power, Commisso said. The average interest rate for a 30-year mortgage was 4.21 percent last week, up 0.53 percent from a year earlier, mortgage giant Freddie Mac reported.
“People are scrambling to get into something and lock in a rate,” Commisso said.