Long Island home prices and sales activity soared last month, as low interest rates and high demand for suburban properties drove buyers into intense competition.
In Suffolk County, the median home price jumped year-over-year by 16.5%, to $480,000, OneKey MLS reported Thursday. The Nassau County median home price rose annually by 13%, to $606,500.
In a sign that prices could be leveling off, the median price of homes that went into contract in Suffolk was $468,650 last month, down almost 2% from the previous four months, listing service figures show. In Nassau, the median contract price was $600,000 last month, unchanged from November.
The number of closed sales and new contract signings spiked by about 33% in Suffolk last month, compared with the same period last year, OneKey reported. Nassau’s housing market saw even bigger annual gains in activity, with closed sales jumping by nearly 35% and pending sales skyrocketing by almost 45%, the listing service said.
Buyers faced a dwindling supply of properties in both counties, with the number of homes for sale plummeting year-over-year by 38% in Suffolk and 18% in Nassau, listing service figures show. At last month's pace of pending sales, it would take 2.1 months to sell all the homes listed in Suffolk and 2.7 months in Nassau, giving sellers a strong upper hand. A balanced market has a six- to eight-month supply, brokers say.
"We're seeing a lot of competition, we're seeing multiple offers on homes," said Martin Nerone, an associate broker at S.A.S. Real Estate in Wantagh who hosted two open houses this weekend that attracted 29 prospective buyers.
Purchasers, he said, "are putting offers in — some at asking, some over asking — and still losing the house.... It usually takes a couple of times for the buyer to get burned before they realize that they have to really come in very strong and be very aggressive."
In the fall, when competition was even more fierce, buyers were offering $25,000 to $50,000 over asking price and still getting outbid, he said. "It has eased a little but houses are still going fast," he said.
Brokers say buyers are eager to take advantage of near-record-low interest rates. The average interest rate was 2.79% this week, down 0.86 percentage points from a year ago, Freddie Mac reported Thursday.
Buyers "truly want to lock in at these interest rates," said Jim Speer, CEO of the listing service.
In addition, the pandemic is driving up demand for suburban homes, as New York City renters seek out spacious homes with backyards.
Long Island is likely to see listings and sales activity rise once people have a clearer sense of whether they'll be able to continue working from home after the pandemic ends, Speer said.
If remote work remains an option, at least part-time, many people are likely to migrate farther from their workplaces, he said. That, along with low interest rates, he said, would "provide substantial tail winds to keep the housing market going strong."