Long Island’s $1-million-and-up home market was bustling last month, with twice as many contract signings as the previous June, even as the pandemic put a damper on the market as a whole.
Homebuyers signed contracts to purchase 68 homes with asking prices of $1 million or more in June, up from 31 a year earlier, the brokerage Douglas Elliman and the appraisal company Miller Samuel said in a report to be issued Thursday. For the overall market, though, pending sales dropped by 8.4% annually, with 2,333 contracts signed last month, the report shows. The numbers reflect sales of single-family homes in Nassau County and western Suffolk County, excluding the East End.
The pace of pending sales varied widely, with activity generally falling at the bottom and rising at the top, the report shows. For homes listed under $400,000, pending sales dropped by 20% annually. For those listed at $400,000 to $499,999, contract signings ticked up by about 1%. Homes asking $500,000 to $799,999 saw contract signings dip by about 2%. And for homes listed at $800,000 to $999,999, pending sales jumped nearly 17%.
The high-end market has gotten a boost from city residents seeking suburban homes and from the backlog of sales activity stalled by the nearly three-month COVID-19 prohibition on in-person showings, brokers said. The restrictions were lifted June 10 on Long Island.
“Now people are saying, ‘you know what, this is the place to be,’” said Ann Conroy, CEO of Douglas Elliman’s Long Island division. With the pandemic prompting many people to spend more time at home, she said, “People look at the house as their sanctuary. ... It’s their playground, it’s their workplace.”
Many buyers are seeking home offices, gyms, spacious yards, pools and, in some cases, tennis courts, she said. “The word ‘downsize’ I haven’t heard in the last month,” Conroy said.
The number of newly listed homes also jumped at the top of the market – rising nearly 27% for homes listed at $600,000 or higher – and fell by about 22% for properties listed at $399,999 or lower, the report shows.
Long Island’s luxury market “outperformed other segments of the market,” said Jonathan Miller, president of Miller Samuel.
One reason for the divergence between higher- and lower-priced pending sales, he said, is that lower-earning buyers have been harder-hit during the pandemic. “The sharp rise in unemployment was heavily skewed towards lower-wage workers,” he said.
In addition, he said, luxury homes have seen prices decline for several years. Now, with more city residents seeking out spacious suburban homes and interest rates nearing record lows, he said, those homes are “getting a new look.” The average mortgage rate was 3.13% last week, mortgage giant Freddie Mac reported.
In the Hamptons, the number of single-family pending sales nearly doubled year-over-year, rising by nearly 89% to 213. The most activity was in the $1 million to $2 million bracket, where buyers signed contracts on 78 homes last month, nearly triple the 27 that went into contract a year earlier.
On the North Fork, pending single-family sales jumped overall by 29% annually. The number of contract signings fell about 45% for homes priced under $500,000. However, they jumped 37% for homes listed for $500,000 to $1 million. And buyers signed 19 contracts last month for homes asking $1 million or more, up from 10 a year earlier, the report shows.
Hara Kang, an associate broker and member of the Atlantic Team at Douglas Elliman in East Hampton, said Hamptons buyers have been making all-cash bids, especially for homes in the $2.5 million to $5.5 million range, and trying to close within two weeks of the contract signing. In one case, he said, a builder agreed to let a buyer move into a newly constructed home before the closing, as a condition of the sale.
In addition to spacious yards with pools and tennis courts, some buyers are seeking accessory buildings such as pool houses, for entertaining and to provide more living space, he said. Some buyers plan to flip their usual commute, working remotely from the Hamptons during the week and returning to their New York City offices on weekends, when the city is less crowded, he said.
Buyers, he said, “want turnkey, ready to move in, something that requires very little work, and they’re willing to pay the premium that the market expects for that type of property.”