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Rising interest rates, tight inventory push LI home prices up 

Home prices rose 7.4% in Nassau and 9% in Suffolk compared with a year ago, according to a report from Multiple Listing Service of Long Island.

Properties for sale on Long Island have been

Properties for sale on Long Island have been rising in price. The median rose in Nassau in August to $550,000, while the median in Suffolk rose to $405,000.  Photo Credit: Barry Sloan

Concern about rising interest rates and a shortage of homes for sale helped push Long Island home prices higher in August, real estate agents said.

In Nassau County, homes sold for a median price of $550,000 in August, a 7.4 percent increase from a year earlier, according to Multiple Listing Service of Long Island statistics released Thursday. Suffolk County homes traded for a median price of $405,000 last month, up 9 percent annually.

The median price of a Suffolk home has risen by at least 5.8 percent year over year in 10 of the last 11 months. In Nassau, the median price has jumped by at least 7 percent in four of the last seven months.

Nassau in August had 5,421 homes on the market, which is historically low but up 8 percent from the past August, while Suffolk had 7,219 homes on the market, down 2 percent from the previous year. With fewer than 13,000 homes for sale on Long Island, inventory is less than half what it was in 2007, before the housing market collapsed.

A gradual increase in interest rates has led some buyers to close sales before borrowing costs rise further.

"Rising interest rates are a concern," said Kimberly Bancroft, an agent at Daniel Gale Sotheby's International Realty in Locust Valley. "But homes still have to be priced correctly, because buyers are equipped with more information than before. So much is available on public websites, so it's easy for consumers to see a house and an area's history." 

First-time home buyers also have lifted the market, said Barbara Wanamaker, broker/owner of Prime Properties Long Island in Huntington. 

"Homes in the $300,000-to-$400,000 range are going for full price or more, and often they're going overnight," she said. "First-time buyers have a little money in their pocket now, because the economy is better."

The number of closed sales fell year over year by 7 percent in Suffolk and 8.5 percent in Nassau, the listing service reported. The number of contract signings rose by 10 percent in Suffolk and 9 percent in Nassau, compared with the previous August.

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