Long Island homebuyers kept real estate brokers busy last month, especially in the luxury market, though the pace of sales is starting to return to normal.
Buyers signed contracts to purchase 2,237 single-family homes in November, up 9.8% compared with a year earlier, the brokerage Douglas Elliman and appraisal company Miller Samuel said in a report to be released Wednesday. The figures do not include East End sales.
November marked the fifth month in a row of year-over-year increases. From July through October, the annual increases ranged from about 23% to 41%, Douglas Elliman and Miller Samuel reported.
The surge in sales activity has been driven by record-low interest rates, pent-up demand from the COVID-19 real estate shutdown that ended in June and an influx of buyers from New York City, brokers said. The average mortgage rate was 2.72% last week, home loan giant Freddie Mac reported.
In November, the market "slowed a wee bit, enough to have agents say, ‘we’re taking a break, this is good, we have time to breathe,'" said Ann Conroy, CEO of Douglas Elliman’s Long Island division. "However, it’s still very, very active."
The biggest annual increase in pending sales was for homes listed for $800,000 to nearly $1 million. In that price range, buyers signed contracts for 192 homes last month, up 73% from a year earlier, the report shows.
In the $400,000 to nearly $800,000 ranges, pending sales were up about 50% from a year earlier, the report shows. And with bidding wars driving up prices for entry-level homes, the number of pending sales in the under-$400,000 range fell by 22%.
Competition among buyers has "pushed many of the markets we’re in over the $400,000 mark … areas that would normally be solidly in the threes," including Selden, Farmingville and Patchogue, Conroy said.
The supply of new listings dropped by 3.7% last month, compared with the previous November, the new report shows.
"Inventory is being burned off faster than it can be replaced," said Jonathan Miller, president and CEO of Miller Samuel.
Demand is especially strong on the East End, where city residents have been seeking refuge during the pandemic, Miller said.
In the Hamptons, pending single-family home sales soared last month by 84% from last November, and more than doubled in the price ranges from $1 million to $10 million, the report shows. On the North Fork, pending single-family home sales increased annually by 33%.
If professionals continue to work remotely and seek out markets such as the Hamptons for primary or second homes, the luxury market "may end up faring better than the overall market in the long run," Miller said.
Even so, he said, "It’s not clear whether pricing levels will be sustained as we’ve moved past the peak of demand. We don’t have a firm grasp of what the economy is going to look like over the next year or two."