Long Island's supply of homes for sale plummeted in October, driving up prices as buyers jostled to close deals.
In Suffolk County, the median home price increased year-over-year by 16%, to $470,000 last month, the multiple listing service OneKey MLS reported Monday. Nassau County home prices rose annually by 10.3%, to $590,000.
For homes that went into contract last month, median prices increased by 16% in Suffolk and 15% in Nassau, compared with a year earlier, the listing service reported.
The number of home sales rose by about 25% in Suffolk and 19% in Nassau, compared with the previous October. The rise in pending sales was even more dramatic, as the number of contract signings soared by 34% in Suffolk and 39% in Nassau from a year earlier, the listing service report shows.
The supercharged pace of sales comes as Long Island homebuyers cope with a shortage of listings. The number of residential listings fell year-over-year by 37% in Suffolk and 19% in Nassau. At last month's pace of pending sales, it would take two months to sell all the homes listed in Suffolk and 2.6 months in Nassau. That's far lower than the six- to eight-month supply that brokers say creates a balanced market.
The strong market gives sellers "more pricing power," said Stephan Mahabir, owner of Exit Realty Advantage in Baldwin. "Buyers have to be more competitive....There’s no more, 'I’ll think about it.' If you see the house on Saturday and say, 'I'll think about it,' it’s gone."
The reasons for the buying surge include record-low interest rates and pent-up demand from the COVID-19 real estate shutdown, which lasted from March until mid-June, said Jim Speer, CEO of OneKey MLS. The average mortgage rate was 2.84% last week, home loan giant Freddie Mac reported.
Many first-time buyers "are just needing to get in on those low interest rates, they don’t want to miss out," Speer said. Plus, he said, "there's still a lot of ground to make up" from the spring shutdown.
"You’re still seeing multiple offers on homes, you’re still seeing bids up above asking price," Speer said. "I would expect it to last at least into early next year."
Despite the rising prices, some homeowners who might consider selling remain on the sidelines, either because they are concerned about whether it's safe to let prospective buyers into their homes during the pandemic, or because they do not yet know whether they will be able to work remotely long-term, Speer said.
"There are some real unknowns," Speer said. "There’s a lot of companies still making those decisions about going back to work. I think that’s hanging over people.... Once those questions are answered, that could spur home sales."