Long Island home buyers are competing for the lowest supply of listings in at least 15 years, pushing up prices and speeding the pace of sales, a new report shows.
The median price of homes on Long Island, excluding those on the East End, increased by 3.9 percent annually to $431,000 in the last quarter of 2018, real estate brokerage Douglas Elliman and appraisal company Miller Samuel said in a report to be released Thursday. It took an average of 70 days for a home to go into contract, down about 10 percent from a year before.
A shortage of listings “is what’s driving prices up, because there’s still limited inventory,” said Ann Conroy, president of the Long Island division of Douglas Elliman. “That’s what’s keeping the prices where they are and pushing the prices up.”
At the end of 2018, brokers listed 9,572 homes for sale on the Island, excluding the East End, the report said. That’s a decline of 6.8 percent from a year earlier and 63 percent from the peak of 26,145 in the spring of 2008, said Jonathan Miller, president of Miller Samuel.
The year-over-year drop in Long Island listings was caused by a steep decline in Suffolk, where inventory dropped by more than 20 percent, year over year. By contrast, in Nassau County the number of listings increased by almost 14 percent annually.
The dearth of listings in Suffolk is caused, in part, by buyers’ demand for affordably priced homes, Conroy said. Another factor is many homeowners’ decision to stay put rather than list their homes, especially if they refinanced their mortgages when interest rates were as low as about 3.5 percent, she said.
With prices rising steadily and interest rates ticking up, homeowners who would like to sell a starter home and buy a more expensive house “can’t necessarily afford the trade-up,” Miller said. That inability to trade up contributes to the dearth of affordably priced listings, he said.
Earlier this month, the Multiple Listing Service of Long Island reported that inventory on the Island had risen by about 1 percent in Suffolk and 15 percent in Nassau, compared with a year earlier. The listing service’s Suffolk data includes many East End homes. By contrast, the Douglas Elliman and Miller Samuel report separates Suffolk into western and eastern regions.
In the Hamptons, the median price in the fourth quarter was $995,000, unchanged from a year earlier, Douglas Elliman and Miller Samuel reported. The number of sales plummeted by nearly 35 percent annually, to 360 in the October-to-December period. Inventory soared by 82 percent, year over year, to nearly 2,200. North Fork home prices increased by 5.4 percent, year over year, to $630,000, Douglas Elliman and Miller Samuel reported.
Many Hamptons sales at the end of 2018 were in the range of $5 million and up, said Ernest Cervi, East End executive managing director for the Corcoran Group. Some investors pulled money out of volatile financial markets and put it in luxury real estate instead, he said. “The high-end buyer was out to strike, and they did in the fourth quarter.”