Home prices in Nassau and Suffolk counties fell for the second straight month in October as the local real estate market showed signs it had reached the limit of what buyers were willing to pay. Homes still sold for more than 10% above prices from October 2020.
The median price fell $11,500 in Nassau, or 1.8%, in October compared with the previous month. In Suffolk, the median dropped $5,000, or nearly 1%.
Nassau's median sale price was $650,000 in October, or 10.5% more than in the same month last year, according to OneKey MLS, the listing service that includes Long Island. In Suffolk, the median sale price was $520,000 last month, or 10.6% higher than in October 2020. Both counties hit record highs in August.
The Long Island home market is on pace to break records for closed sales and pending sales in 2021, and buyer demand remains strong, said Jim Speer, CEO of OneKey MLS.
"I think it is a bit of a price drop," Speer said. "It’s probably a bit too early to say that it is a trend."
Pending sale prices, which reflect transactions that haven’t closed, had been trending downward in recent months, but ticked up in October from the previous month in both counties, suggesting final sale prices won’t keep falling for long.
For homes that haven't closed, the median pending sale price in October was $650,000 in Nassau and $525,000 in Suffolk. Those prices were 6.6% above the October 2020 level in Nassau and 9.4% in Suffolk.
What to Know
- Home prices in Nassau and Suffolk counties fell for the second straight month in October, according to OneKey MLS.
- The median sale price in Nassau was $650,000. In Suffolk, it was $520,000.
- Houses sold in October cost 10.5% more in Nassau and 10.6% more in Suffolk than in October 2020.
George Castera, a real estate broker in Freeport, said he has noticed prices stabilizing and the pace of sales slowing down.
"It’s going to come down," he said. "Everyone was frazzled because of the pandemic. People paid over asking price and prices were inflated as a result."
The number of homes sold in both counties fell by about one-fifth from October 2020, when a backlog of transactions reached closing after they were slowed by the pandemic. Sales dropped 18% in Nassau in October from the same month a year ago to 1,325. Suffolk closings fell 20.8% to 1,639 — the lowest since May.
Speer attributed the decline to a limited supply of homes on the market. Based on the pace of October pending sales, it would take 2.3 months to sell all the current listings in Nassau and 2.1 months in Suffolk. A supply of at least five months’ worth of homes evens out the market for buyers and sellers.
Home sales typically tail off in the colder months, but Speer doesn’t expect the seasonal pattern to be as pronounced this year.
"We still have such high buyer demand out there and low inventory," Speer said. "so I don’t think we’ll probably have that same seasonal change that we’ve had in the past."
Several factors are keeping Long Islanders from putting their homes on the market, Speer said. Sellers who plan to buy elsewhere on Long Island might be concerned about finding their next home given the limited options available. Others are waiting to see whether their employers will ask them to return to the office full-time before moving.
Low interest rates have helped fuel demand. Mortgage rates fell in recent weeks after climbing from August to October. The average 30-year, fixed-rate mortgage carried a 2.98% interest rate for the week ending Nov. 10. The rate had reached 3.14% two weeks earlier, according to mortgage giant Freddie Mac.
Speer doesn’t think a potential gradual increase in interest rates will affect buyers’ monthly mortgage payments enough to affect their behavior.
"You’d have to see quite a rise, which is not expected, for it to really have somebody look at what their monthly payments are going to be and … dissuade them from buying right now," Speer said.
Holly Brainard, an associate real estate broker with Daniel Gale Sotheby’s International Realty in Stony Brook, said sellers still have an edge, but she’s seeing shorter lines at open houses than in the spring and summer, when 50 buyers would show up, yielding about 15 offers.
"It was feverish before," Brainard said. "Now, I would say it’s definitely urgent."
Correction: There were 1,639 closings in Suffolk County in October, or 20.8% fewer than a year ago. Those numbers were misstated in an earlier version of this story.