Long Island home prices jumped in December as listings fell

Long Island home prices surged in the final days of 2024, as listings dropped sharply during the holiday season, boosting sellers' edge in the market. 

In Suffolk County, the median price among single-family homes that sold last month matched a record high at $680,000, or 8.8% higher than the same figure in December 2023, according to data released Monday by OneKey MLS, the multiple listing service that covers Long Island.

In Nassau County, the median sale price rose 11.7% in December to $800,000, compared with the same month a year ago. Home prices in Nassau reached their highest point in August, when the median deal sold for $835,000. 

December is typically a slower month in the real estate industry, as fewer homeowners list their homes around the holidays. Still, the number of deals that closed last month on Long Island rose 10% from the same month a year ago to about 1,700.

"Both counties ended the year on a strong note," said Richard Haggerty, CEO of OneKey MLS. "Buyers are still willing to pay the increasing prices."

Real estate experts told Newsday they see no indication that buyers will get relief in the market anytime soon, given the persistent shortage of available homes for sale and economic indicators that mortgage rates will remain elevated this year.

The number of new listings coming to market on Long Island last month was consistent with the previous December. But the roughly 1,000 houses for sale was about half the number that were newly listed in October. 

With few new entries, the number of single-family homes for sale on Long Island dwindled to 4,068, which was slightly lower than December 2023. 

Long Island lacks large tracts of undeveloped land that could be suitable for new houses, so buyers are at the mercy of an inadequate number of homeowners who want to sell, said Margaret Burkett, an agent at Signature Premier Properties in Cold Spring Harbor.

“There’s no space to build on, so the inventory problem is going to continue," she said. 

Serious buyers in winter

While listings can be scarce, people buying and selling during the holidays tend to be motivated to make a deal, said Kevin Iglesias, an associate broker at Signature in Miller Place.

"In the wintertime, what we see is the most serious buyers out there shopping," Iglesias said. 

Buyers have been largely unfazed by higher interest rates. The average 30-year fixed mortgage rate began rising in December and stood at 6.96% for the week ended Jan. 23, according to mortgage giant Freddie Mac.

There is growing consensus in the real estate industry that mortgage rates are unlikely to fall in the first half of the year but that elevated rates won't negatively affect buyer demand, Haggerty said. 

"I'm not optimistic about any significant lowering of interest rates anytime early or in the mid-part of 2025," he said. 

Haggerty said he is hopeful that more homes will come on the market in the spring, as homeowners who have resisted putting their homes on the market may decide they can no longer wait to sell. Many local homeowners face the prospect of giving up a 3% mortgage rate for a rate of nearly 7%, which increases the cost of their potential monthly housing payment. 

The most important factor to watch for the future direction of mortgage rates is inflation, said Greg McBride, chief financial analyst at Bankrate in West Palm Beach, Florida. Faster growth in consumer prices could mean mortgage rates stay higher, he said. 

“It will take a meaningful and sustained improvement in inflation to bring mortgage rates down in a material way,” he said.

McBride said Long Islanders are unlikely to see a surge in available homes for sale, a drop in home prices or a sharp decline in mortgage rates. Such a scenario would probably only occur in the case of economic turmoil, he said.

That means homebuyers who can afford to purchase shouldn’t expect that waiting will give them a better chance at landing a deal, while those priced out of the market should focus on ways to boost their income and pay off debt, McBride said.

“It’s unlikely the affordability crunch is going to ease in a significant way in the near term,” he said. “For prospective buyers, make use of this time to stabilize your financial foundation.”

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

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.