Long Island home prices hit new highs, the supply of listings plummeted and bidding wars broke out in nearly 3 in 10 home sales as the market roared back to life this summer after the COVID-19 shutdown.
The median price for homes on Long Island, excluding the East End, rose to $500,000 in the July-through-September period, up 6.6% from a year earlier and the highest price on record, the brokerage Douglas Elliman and the appraisal company Miller Samuel said in a report to be released Thursday.
Inventory was 25.5% lower than a year before, forcing buyers to compete for a 3 1/2-month supply of listings, about half what brokers say creates a balanced market. With so few homes on the market, the number of sales dropped by 15% year-over-year, the report shows.
East End prices also hit their highest levels in at least 14 years. In the Hamptons, median prices soared by 40% year-over-year, to $1.2 million, and on the North Fork median prices jumped by 11.7% annually, to $702,500, according to the report.
In Nassau County and western Suffolk, bidding wars drove final sale prices over asking prices in nearly three out of 10 transactions, said Jonathan Miller, president and CEO of Miller Samuel. Homes sold over their asking price in nearly 28% of sales, compared with about 25% a year earlier, he said.
Long Island is in the middle of a "post-lockdown boom" after COVID-19 restrictions on real estate sales activity were lifted in June, and low interest rates — and, to some extent, an "outbound migration" of buyers moving from New York City to the suburbs due to the pandemic — are contributing to the market's furious pace, Miller said. The average interest rate was 2.81% last week, the lowest on record, mortgage giant Freddie Mac reported.
"It is an extremely fast-moving and competitive market," Miller said.
Ann Conroy, CEO of Douglas Elliman’s Long Island division, recommended that buyers get preapproved for a mortgage so they’ll know what they can afford and they won’t be slowed down by the approval process.
"We've had low inventory for many years, but not like this," she said. Plus, she said, "let's not underestimate the value of low interest rates."
Josh Handler, an associate broker with Exit Realty Premier in Massapequa Park, said even the most well-qualified buyers are getting knocked out.
"If you like the house, 20 other people like the house, and that means you're going against 20 other offers," he said. "When you're offering $50,000 over asking price, and you have 800 credit scores, and you have a good down payment, and you still can't get the house, you know, it gets frustrating. ... If you want to have a chance at buying a house, you need to see it literally within 24 hours of it coming to the market, and you have to put in the strongest offer you could possibly think of."
Cory and Nicole Fraile, both 31, are hoping to move from their two-bedroom ranch in West Babylon to a larger home in Nassau County to be closer to their relatives as they plan to start their own family. Cory, who works in compliance at a financial firm, said he and his wife, Nicole, who works in accounting and payroll at a company based in Manhattan, hope to buy a large Colonial-style home on a corner lot with plenty of room for their dog Cooper — and eventually, their children — to run around.
"We're trying to find a forever home," he said.
They’ve put in bids on two houses, but lost out both times, he said. Now, he said, they’ve been looking at houses that are still under construction, that have not yet hit the market:"Hopefully that gives us a competitive advantage, so we can avoid ... being outbid."