An aerial photo of houses in Elmont.

An aerial photo of houses in Elmont. Credit: Newsday/John Keating

Higher mortgage rates finally weighed down home prices enough to pull them below last year’s levels in February in Nassau County, which saw a year-over-year decline in its median home price for the first time since August 2015.

The median price among closed sales last month in Nassau was $640,000, or 1.5% below the median in February 2022 of $650,000, according to new data from OneKey MLS.

In Suffolk, the median rose 1.5% to $533,500 last month compared with February 2022.

Meanwhile, the number of transactions has fallen to its lowest point in years. Only 1,387 sales closed across Long Island last month, which was about 37% fewer than during the same month a year ago.

What to know

  • The median sale price among homes in Nassau County fell compared with the previous year for the first time since 2015. The median was $640,000, or 1.5% lower than in February 2022.
  • The median in Suffolk increased by 1.5% last month to $533,500 compared with the previous year, according to OneKey MLS. 
  • Local real estate agents say they still see plenty of competition for homes because there are less than half as many listings as before the pandemic. 

Back in February 2021, there were more transactions recorded in Suffolk alone than last month’s total for both counties. Granted, it can take weeks to months for a sale to close, so those figures reflect market activity in December and January. There were 1,899 pending sales last month, which reflect sales in contract that have not yet closed.

“While these numbers may look dramatic, when you put them in the context that the beginning of 2022 was a continuation of an extraordinarily strong period for home sales in our region, they’re going to look weaker than they really are,” said Richard Haggerty, CEO of OneKey MLS.

To be sure, Long Island homeowners are coming off a period of rapid price appreciation. The median price in Nassau last month was still nearly 22% higher than it was in February 2020 before demand rose sharply after the onset of the COVID-19 pandemic. The Suffolk median rose about 32% during that time.

It’s now been about a year since mortgage rates began to rise, ending an era of historically low interest rates that fueled growth in home prices. The average mortgage rate in February was 6.26%, according to mortgage giant Freddie Mac. In February 2022, it had averaged 3.76%. (Last week, the average was 6.73%.) 

A jump of that magnitude adds hundreds of dollars to monthly mortgage payments for Long Island homebuyers and cuts into the amount they can afford to spend.

“People lost buying power,” said Angela Prince, a real estate broker who leads a team of agents at Weichert Realtors in Bay Shore.

Prince said that last year, there were some houses for sale where she expected there to be so much competition that she didn’t think it was worth it for potential buyers to even pay a visit if they weren’t willing to offer above asking price.

“That’s how bad it was before. Now it’s like, ‘You could look at the house. Maybe you will get it for asking [price],’” she said. “The conversation has changed but also the offers the buyers are putting in have changed.”

The paltry number of homes for sale has continued to lead to multiple offers on attractive listings, agents said.

Fewer listings

The number of listings available across Long Island at the end of February, 4,818, was still less than half what was on the market in February 2020.

Rachna Bhatia, a real estate agent at VORO in Manhasset, said she hasn’t seen much of a drop-off in competition in areas such as Levittown, where she recently helped a buyer close on a six-bedroom Levittcolonial for $775,000.

“I don’t see a dramatic shift,” Bhatia said. “There’s still a lot of demand, especially for homes under $1 million, which was surprising to me because I thought with the high interest rate, things would slow down and it would be easier for my buyers to get a house, but it’s not really happening." 

Haggerty, of OneKey MLS, said he is less confident than he was last month that Long Island will see a robust spring market early in the season. That’s because recent inflation reports have shown the Fed may have to take further action to slow down increases in consumer prices, which could lead to higher mortgage rates. The failures of Silicon Valley Bank and Signature Bank may have also shaken consumers’ confidence, he said, though he believes decisive Fed action helped to contain those worries.   

“Is any of this going to be reassuring to consumers right now? I’d say no,” he said. “I still am optimistic there will be a strong spring market, but it may be a delayed spring market as people wait and see how the dust settles.”

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