Real estate agents and homebuyers speak about the fiercely competitive market and what buyers should expect in 2022 on Long Island. Newsday's Faith Jessie reports. Credit: Steve Pfost; Morgan Campbell; File Footage; Photo Credit: Danielle Silverman/Newsday

Almost half of the Long Island homes sold last year went for above asking price, and in the most competitive pockets, bidding wars pushed as many as two-thirds of homes above the initial list price.

The hottest communities were clustered in Suffolk County, where affordability and lower tax bills attracted more buyers than the market could handle.  

Communities located in the Towns of Brookhaven, Babylon and Islip where the median sale price last year was less than $500,000 had the most competition, according to data compiled for Newsday by Manhattan appraisal firm Miller Samuel. The data excludes sales in the Hamptons and North Fork.

In Lake Ronkonkoma, where 122 homes sold last year, 69.7% of buyers paid above asking price. In Centereach, the rate was 66.9%. In West Sayville, it was 64.4%. Selden and North Babylon rounded out the top five, at 61.7% and 61.5%.

“That is surreal,” said Jonathan Miller, president and CEO of Miller Samuel. “That kind of market sounds miserable to be in as a buyer.”

In all, 36 communities on the Island had more than half of houses sell for above asking price last year. All but one were in Suffolk; the Nassau outlier was North Massapequa, where 23 houses sold last year. Newsday excluded communities with fewer than 20 sales from its analysis.

Bidding war share

The map below shows the Long Island communities that had the highest percentage of homes that sold for above asking price in 2021, according to appraisal firm Miller Samuel.

The market is just as crowded with buyers in 2022.  Falling inventory and rising interest rates have made buyers even more aggressive with their offers, particularly in the Ronkonkoma-area communities at the top of the list, where median sale prices were below $450,000 last year, said Bryan Karp, an associate broker at Coach Realtors in Smithtown.

“The biggest thing is there’s just a shortage of housing in Suffolk County and especially in those towns because those towns are very affordable,"  Karp said. “There are a lot of first-time homebuyers. The taxes are reasonable. They’re centrally located — close to the expressway, close to the Ronkonkoma Hub project — so it’s like the perfect storm.”

Suffolk tops list

Competition for homes on Long Island predates the pandemic, but the move toward remote work and renewed interest in the suburbs sent the market to new heights last year, when 48.4% of Long Island homes sold for above asking price. In 2020, when the pandemic stifled sales for months but led to a summertime boom, that figure was 29.4% and not a single community had more than 50% of houses sell for above asking price. Miller considers sales above asking price evidence of a bidding war, but noted it's possible some buyers without any competition still paid more than list price to secure a deal. 

In Suffolk, 57.5% of homes sold above the asking price in 2021, up from 35.7% the previous year. In Nassau, the share of bidding wars rose to 38.4% from 21.9% in 2020. The percentages exclude the Hamptons and North Fork, which Miller Samuel treats as a distinct market.  

Sustained buyer demand has kept prices rising into 2022. The median sale price in February was $650,000 in Nassau County, or 8.5% higher than in February 2021, and $527,000 in Suffolk County, or 10.9% higher than a year earlier, according to OneKey MLS. The number of homes for sale on Long Island hit a record low in January, and Miller believes it would take at least double the number of listings to provide any semblance of relief for buyers.  

“With prices rising rapidly, you often see inventory come on the market. The higher prices draw sellers into the market,” Miller said. “But this has been such a prolonged boom that I think those potential new listings have been sold off for the most part. Unusually low supply essentially guarantees that bidding wars will be abundant.”

Miller, who tracks real estate data across some of the country’s premier real estate markets in New York, California, Colorado, Florida, Massachusetts and Texas, said there’s only one area with competition on par with central Suffolk County last year — Southern California. Areas such as San Diego County, Orange County and Los Angeles are the only others he recalled that had up to two-thirds of homes selling for above asking price.

“Who would have thought that Long Island and Southern California would have something in common?” Miller said.

Cashing in and trading up

Around the end of last year, Alessandra Gomez-Fanti and her husband Anthony Fanti decided they were ready to move out of the home they purchased in 2019 in Patchogue, one of the communities with the highest share of bidding wars last year. The couple, both 29, had been drawn to the home, which was close to restaurants and bars on the village’s Main Street, but as they looked to start a family, they wanted a home on a quieter street and were interested in moving to a different school district.

Bidding wars were a good thing for them as sellers, but as buyers, not so much. "We felt confident going in but much to our dismay, we could not even have imagined how competitive it was,” said Gomez-Fanti, who works as a customer success manager for a software company. 

She recalled seeing houses hit the market online, calling her real estate agent to schedule a showing for the next day and hearing hours later that the seller had already reached a deal.

“That happened multiple times,” she said. “At first, most of the time, in order to secure the home we were seeing you basically needed to offer at least $50,000 over the list price, but toward the end, we were seeing it was actually closer to $100,000.”

The couple was in a better position than most. The increase in market prices had driven up their home's value. The three-bedroom colonial, with two and a half bathrooms — one of which was recently renovated — sold for $568,000, or $40,000 above the asking price. They received five offers from prospective buyers.   

The couple had purchased it three years earlier for $365,000, which at the time was a $10,000 discount off the list price. "We even had negotiating power back then," Gomez-Fanti said. 

Alessandra Gomez-Fanti and her husband Anthony Fanti, at the home...

Alessandra Gomez-Fanti and her husband Anthony Fanti, at the home they recently sold in Patchogue. Credit: Newsday/Steve Pfost

They couldn't say the same as they searched for their next home.  The couple spent about three months, looking for a four-bedroom home with a finished basement and garage. Gomez-Fanti said what surprised her the most was that it didn’t matter whether they were looking at houses at the bottom of their budget or the top. They were always met with lines. She was also surprised by homes listed above $900,000 despite decades-old kitchens.

“For open houses, there’s always a line out front, no matter how nice the house is or how much work it needs,” she said.

They found a four-bedroom colonial listed for $739,000  in Kings Park, another community where at least half of homes sold for above asking price last year, and offered $775,000. They were told they were under consideration but not among the top five bidders, and upped their offer to $815,000 to secure the house, beating out a cash buyer by about $7,000.

“We’re hoping that the profit we’re making off this home [in Patchogue] will cover the closing costs and also our down payment for this next house,” Gomez-Fanti said.

Suffolk’s appeal

Properties in the central part of Suffolk County tend to offer larger lot sizes, houses with more square footage and quick access to the Great South Bay and Fire Island, said Meg Smith, owner and broker at Meg Smith and Associates Real Estate in Bay Shore, which she recently agreed to sell to Daniel Gale Sotheby’s International Realty.

“Since things went remote, things are moving a little bit further east,” Smith said. Competition in “those towns [doesn't] surprise me because they’ve been pretty affordable, and you get a lot more for your money in those particular areas. As far as bidding wars go, inventory is so low, and if [buyers] want to purchase something, they’re going to have to be ready the minute it hits the market.” 

Cost-conscious buyers can also count on lower tax bills in the middle of the Island, said Anthony Calcaterra, a real estate agent with Realty Connect USA in Hauppauge, who worked with Gomez-Fanti to sell and buy her new home.

Janice Tufano, 40, and her husband, Craig, 45, are hopeful that the seller’s market will get them a fair price for their Medford home as they move to Charlottesville, Virginia, where Janice has accepted a job as an emergency room nurse. The Tufanos, who welcomed twin boys in October 2020, believe they will be able to live more comfortably in Virginia with lower living expenses. They plan to rent a three-bedroom townhouse with an attached garage for $2,400 when they first move south.  

“With the salary Virginia is offering, it’s comparable to what I’m earning here in New York, but our bills are not going to be as much,” she said.

Janice and Craig Tufano bought this Medford three-bedroom high ranch in 2013...

Janice and Craig Tufano bought this Medford three-bedroom high ranch in 2013 for $260,000; they just listed it for $510,000. Credit: Morgan Campbell

The Tufanos bought their three-bedroom high ranch in 2013 for $260,000, and Janice Tufano estimates they have spent about $100,000 renovating the house, putting in a new deck and upgrading the property’s sprinkler and drainage system. It’s listed for $510,000 by Salvatore Di Puma, a real estate agent with Exit Realty Achieve in Smithtown, who showed the house to prospective buyers at an open house last weekend. 

Tufano said she’s balancing her interest in making a deal quickly ahead of the family’s move to Virginia with getting the best price. “I don’t want to move fast and not get the best deal on the house either,” she said.

Rising prices

While prices rose in all of the most competitive areas for buyers, they didn’t rise by as much as in other areas of the Island.  The average increase in median sale price in those 36 hottest  communities in 2021 compared to the previous year was 7.8%. That compares with a 14.3% average increase for Long Island, excluding the East End.

Competition doesn’t always drive steep price increases, Miller noted.

“I think there’s an assumption that the higher the bidding wars, the higher the price growth, and as we can see here, that’s not necessarily the same thing. If you have a market that has a higher bidding war share than another market, it doesn’t necessarily mean that prices are rising faster,” he said.

Maria Wilbur, a real estate agent with Keller Williams Realty in Garden City who frequently works with buyers and sellers in Suffolk County, said she tries to set realistic expectations. If a buyer can afford up to $425,000, she will often show homes priced around $400,000 with the expectation they will need to pay over asking price to make a deal.

Even with that strategy Wilbur said she recently had a day in which she had nine offers rejected across seven buyers. Bidding wars have led buyers to waive their right to an appraisal and a home inspection — a risky proposition that could speed up a deal but leave them on the hook for additional expenses.

“I try to stay positive for them,” Wilbur said. “I let them know, ‘Look at all these people on the line. We’re not the only ones. Eventually it’s a numbers game. It’s a tough market. That just means you have to maybe be a little bit more open minded about what you’re looking for.”

The home Lauren Mikelinich and Chris Lowe recently purchased in...

The home Lauren Mikelinich and Chris Lowe recently purchased in East Patchogue. Credit: Lauren Mikelinich

Lauren Mikelinich, 29, and her boyfriend Chris Lowe, 28, knew they didn’t want to pay rent when they planned to move in together early last year, and set out to find a home that wouldn’t create too much of a commute to Mikelinich’s job teaching at an elementary school in Hampton Bays. They searched along the South Shore from Patchogue to Center Moriches for their first home. Mikelinich estimates they looked at 20 to 25 homes last winter, scheduling appointments after work and attending multiple open houses on Saturday and Sunday.

The first-time homebuyers faced plenty of rejection. Mikelinich said they put in offers on about half the homes they viewed, with all of them at or above asking price.

After about a two-month search, Mikelinich and Lowe reached a deal on a home in East Patchogue listed for sale by owner and closed in July for $470,000, which was slightly above the asking price. They think they were the only buyers to submit an offer.

“We were lucky in getting here early,” she said. “We were one of the first few people to see the house and we were encouraged by our real estate agent, if you like it, put in an offer, so we put in an offer right away.” Before COVID, she said, “I was under the impression it was out of the norm to have to put in an offer above asking price before even getting to a rebuttal. But we were told, ‘This is how it is right now.’”

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