LI home prices rise, but growing inventory gives buyers more options

A growing number of homes for sale is giving Long Island home buyers more options, though prices are still rising and the market remains tight.

In Nassau County, the median closed sale price was $530,000 in May, up 2.9 percent from a year earlier, the Multiple Listing Service of Long Island reported Thursday. Suffolk County’s median closed sale price rose by 6.8 percent year-over-year, to $390,000.

Inventory increased by nearly 15 percent in Nassau and 2 percent in Suffolk, compared with the previous May, listing service figures show.

“We’re starting to feel the effects of a more balanced market,” said Michael Flynn, an associate broker with Keller Williams Realty of Greater Nassau in Garden City. For homes priced at $500,000 or less, he said, “it’s still going very quick. There’s very strong demand.” But demand tapers off as prices rise, he said: “Over $600,000, we’re really seeing more of a buyers’ market.” 

The number of closed home sales fell annually by 1 percent in Nassau and 4 percent in Suffolk, the listing service reported. In another sign that the market could remain sluggish, the number of new contract signings dropped by 0.9 percent in Nassau and ticked up just 0.1 percent in Suffolk.

At the current pace of sales, theoretically selling all the homes on the market would take 6.4 months in Nassau and 5.2 months in Suffolk. A market balanced between buyers and sellers has a six- to eight-month supply, brokers say.

In Nassau, the county’s reassessment as well as the federal government’s new $10,000 limit on deductions for state and local taxes have prompted buyers to start asking about property tax bills much earlier in the process than they used to, Flynn said.

“Just about every buyer focuses on the taxes early on,” even at open houses, he said.

Nassau’s high home prices and hefty tax bills are driving some buyers to less expensive homes in Suffolk, brokers said.

Suffolk has seen an influx of buyers living in Queens who are looking for more space at a reasonable price, said Brizeida Hernandez, an associate broker with Millennium Homes in Bay Shore.

“It’s more affordable here in Suffolk” than in Nassau or Queens, she said. In some areas of Suffolk, annual property tax bills can range from roughly $6,500 to $8,500 for homes worth $350,000 to $600,000, she said.

Many recent buyers commute to jobs in the city, she said. “Some of them take the train, some of them drive, but they don’t mind,” a longer commute  since they are getting more for their money, she said.

What’s more, rental prices have risen so much that it can be cheaper to buy, especially if the homeowners can rent out an extra bedroom to a cousin, she said: “They’d rather buy, because the difference is only $200 or $300.”

By Maura McDermott

maura.mcdermott@newsday.commauramcdermott

Maura McDermott covers health care and other business news on Long Island.