Homebuyers on Long Island got no relief last month, as a shortage of homes for sale kept driving up prices, a new report shows.
In Suffolk County, homes sold for a median price of $470,000 in March, up 17.5% from a year earlier, the multiple listing service OneKey MLS reported Tuesday. Nassau County’s median sale price increased by 13.2% annually, to $600,000, the listing service reported.
A scarce supply of listings, a steady stream of buyers leaving New York City in search of suburban properties during the pandemic and record-low mortgage rates are fueling Long Island's real estate boom, real estate agents said. The average mortgage rate was 3.13% last week, mortgage giant Freddie Mac reported.
Real estate agents said they believe the market is likely to stay hot for at least a few months to come.
"The inventory is very slim, [and] the demand is very strong," said Gerald O’Neill, an associate broker with Signature Premier Properties in Amity Harbor. "I don't see anything right now that's going to change the pace of what we're going through until the inventory starts to build back up, or the buyers finally say, 'that's enough, I'm not going to pay this next price jump.'"
And while prices could level off or dip at some point, they're unlikely to plummet as they did when the housing bubble burst in the late 2000s, said Jim Speer, CEO of OneKey.
"While the prices could come down a bit, I wouldn't see anything drastic like in the past," he said. The housing market, he said, is on "much more solid footing" now than it was in the late 2000s, when lax mortgage lending standards led to a massive wave of foreclosures.
Indeed, Speer pointed out that the prices of homes that went into contract recently are rising. The median pending sale price in March was $500,000 in Suffolk and $640,000 in Nassau, the listing service reported. That's at least $20,000 higher than the pending sales prices from August through January, and more than 15% higher than a year ago, listing service figures show.
"There's not many buyers who are deciding that they can't afford it," Speer said. "As long as interest rates remain low, they still seem to find a way."
The number of home sales in Nassau and Suffolk jumped by almost 54% last month compared with a year earlier, when the real estate market came to a virtual standstill after the COVID-19 shutdown began on March 22. The number of homes going into contract rose by almost 49% compared with March 2020.
At last month’s pace of pending sales, it would take two months to sell all the homes listed for sale in Nassau and 1.7 months in Suffolk. Brokers estimate a balanced market has a five- to eight-month supply of homes.
Homes "are hitting the market and they're selling right away," Speer said.
One reason for the listing shortage is that homeowners do not yet know whether remote work will continue long-term, which makes it difficult to decide whether, and where, to move, Speer said. Another factor is some homeowners' anxiety about letting prospective buyers into homes during the pandemic, agents said. And at this point, the shortage itself is actually preventing some homeowners from listing their houses, agents said.
"Every agent I know has sellers who would consider putting their house on the market, but they take a look into the market and can't find anything that they would move to, whether they're buying up or buying down," O'Neill said. "Unless they're getting off Long Island. Then they're cashing in and they're going off Long Island, and they are the winners in this market."