Homes for sale have fallen by half since pandemic started
This home in Wantagh is listed for $639,000, which is just below the median sale price for a home in Nassau County in the fourth quarter. Credit: Prince & Associates Realty Group
Strong demand for housing and a collapse of the number of homes for sale on Long Island combined to make the fourth quarter an extraordinarily difficult one for buyers.
But you wouldn’t be able to tell the strength of the market just by seeing the number of sales during the last three months of 2021.
Long Island home sales during that period, excluding the Hamptons and North Fork, fell by 15% to 8,451 compared to the fourth quarter of 2020, according to new data from real estate brokerage Douglas Elliman and appraisal firm Miller Samuel.
What to know
Long Island home sales, excluding the East End, fell by 15% in the fourth quarter of 2021 compared to the same period a year earlier, as the number of houses for sale dropped by one-third to a record low 4,280.
The median sale price was $570,000 across the region. Nassau's median price was $650,000 and Suffolk's was $505,000, excluding the Hamptons and North Fork.
Rising mortgage rates could slow the pace of sales but because housing inventory is "insanely low," modest rate appreciation won't be enough to tip the scales toward buyers.
The problem is the Island’s shortage of homes for sale deepened in those months, falling to a record low 4,280 as of Dec. 31. That represents a 34% drop in listings from a year ago. More than half of all sales had multiple bidders competing to make a purchase for the second quarter in a row, said Jonathan Miller, CEO of Miller Samuel.
"Inventory isn’t low. It’s insanely low. It has essentially collapsed," he said.
Comparing the fourth quarter to the same period in 2019, before the pandemic, paints an even starker picture. There were 11% more sales on Long Island in the final months of 2021 than at that time in 2019, but buyers had half as many houses to choose from at the end of last year.
"This is truly the lowest inventory I’ve ever seen," said Ann Conroy, CEO of Douglas Elliman Long Island, who started working as a real estate agent on Long Island in 1981. "The spring market is coming so we’ll see what happens."
Conroy noted that two factors often drive down inventory — a lack of new listings or a rapid pace of sales. "What's happening now is both," she said.
The dearth of listings has kept prices rising. The median sales price on Long Island, excluding the East End, was $570,000 in the fourth quarter, 8.6% higher than in the same period a year earlier.
In Nassau County, the fourth quarter median sale price was $650,000, or 8.3% higher than at the same time in 2020. In Suffolk, the median sale rose 11% to $505,000, excluding the Hamptons and North Fork.
Prices might not be breaking records as they were last summer but it’s not accurate to say the market is cooling, said Angela Prince, a real estate broker and owner of Prince & Associates Realty Group in Bay Shore. Buyers are still faced with multiple bidders competing for limited choices and frequently need to submit offers above asking price.
"I’m tired of seeing that word," Prince said of those who say the market’s cooling. "How much is the buyer feeling that change? They’re not."
She took buyers to open houses in Holbrook, Lindenhurst and Massapequa over the weekend of Jan. 15-16, when temperatures plunged below freezing, and routinely saw 20 to 30 people waiting for tours.
Overpriced houses might not draw a crowd, but "for the ones priced for the market or slightly above, the lines were long," she said.
Christopher Mignone, a real estate agent at Realty Connect USA in Oakdale, knew a house he is marketing in Huntington, listed at $509,999, might draw a crowd. Last weekend, he had about 25 groups of potential buyers each day. The house was one of only 23 for sale that are zoned for South Huntington schools. In a healthy market, there would be more than 50 listings in that area, Mignone said.
Rising mortgage rates could hold back some buyers. The average rate for a 30-year loan reached 3.56%, the highest level since March 2020, for the week ending Jan. 20, according to mortgage giant Freddie Mac.
"We’re expecting multiple rate increases by the Fed through the course of 2022, which has the effect of potentially slowing down sales levels and causing inventory to edge higher," Miller said. "Even if inventory doubled from its current level, it would still be low."
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
