Home prices hit record highs in Nassau and Suffolk counties last month, as low interest rates and intense competition for suburban dwellings drove up the cost of housing.
In Nassau County, homes sold for a median price of $645,000 in June, up 16.2% from the same period last year, OneKey MLS, the listing service that includes Long Island, reported Thursday. Suffolk County homes traded for a median price of $510,000, up 18.8% annually, the listing service said.
Those were the highest prices ever recorded in both counties, and the largest year-over-year gains, OneKey reported.
What to know
- LI home prices hit record highs of $645,000 in Nassau and $510,000 in Suffolk last month.
- Low interest rates and strong demand for suburban homes are fueling the increase in housing costs.
- It’s still a sellers’ market but some brokers say the intense competition is starting to ease a bit.
- The supply of new listings has dropped, especially for homes priced under $400,000.
However, there are signs the Long Island real estate market could be getting a little less competitive.
One broker said the frenzy of bidding wars is starting to abate, and it’s becoming less common to see long lines at open houses.
"The Long Island market has definitely cooled off a little bit," said Johnson John, owner of North Star Homes in Garden City. "If there were 30 buyers [for each house] before, now you have 20." Some buyers have given up after losing out in too many bidding wars, he said.
Even so, he said, "20 buyers per house is more than enough to get the job done."
The price of homes that went into contract last month grew by slightly less eye-popping amounts than the trends in closed sales, OneKey figures show. In Nassau, buyers signed contracts for homes at a median price of $657,000, up 12.3% annually. In Suffolk, homes went into contract for a median price of $525,000, up 15.4% from a year earlier.
Also, the median price of pending sales was lower in June than it had been the previous month. In May, the median pending sales price was $665,000 in Nassau and $539,500 in Suffolk.
Tracking home sales from month to month — rather than comparing them with 2020 numbers — can provide "a more realistic picture of what the housing market conditions are today," said Jim Speer, CEO of OneKey. The effect of last year's pandemic shutdown, he said, "is still reflected in the housing reports and I expect that impact to linger for a few more months."
Comparing last month’s housing market with June 2020 can give a distorted picture of home sales trends, since the nearly three-month COVID-19 real estate shutdown ended in mid-June last year. The near-total halt in home sales was quickly followed by a burst of buying activity.
The current housing market remains tipped in favor of sellers. At the pace homes went into contract last month, selling all the homes on the market would take 2.3 months in Nassau and 1.9 months in Suffolk, listing service figures show. A balanced market has a five- to eight-month supply, brokers say.
While prices could decline moderately, according to brokers, the market is unlikely to experience a crash since interest rates are low, demand remains strong and lending standards have been tight. The average mortgage rate was 2.9% last week, mortgage giant Freddie Mac reported.
The rising prices have prompted some homeowners to put their properties on the market, especially those who are leaving the region, John said. He said four clients who sold their homes recently moved to Colorado, Texas, North Carolina and Pennsylvania.
"If they're leaving New York State, especially if they're closer to retirement … they are extremely eager to get out of town," he said.
But for those who wish to stay on the Island, it’s difficult to sell one property and purchase another, since prices have soared throughout the market, he said.
"That's keeping people from selling, to be honest: ‘Where do I go?’" John said.
Indeed, the supply of new listings has dropped, a separate report shows.
Last month, brokers brought 4,022 new listings to the Long Island market, excluding the East End, down by 4.8% from the previous June, the appraisal company Miller Samuel and the brokerage Douglas Elliman reported.
However, while new listings fell overall, with an especially steep decline for homes priced under $400,000, the inventory of homes listed for $500,000 to nearly $1 million grew, Miller Samuel and Douglas Elliman reported. In the price band from about $600,000 to $800,000, the number of listings jumped year-over-year by 32%.
That disparity reflects the greater ability of higher-income homeowners to afford their next home purchase on the Island or leave the region, real estate experts said.
"The significantly higher equity that many [homeowners] are enjoying is money on paper … unless they're leaving the area," said Jonathan Miller, president and CEO of Miller Samuel. Plus, he said, the supply of listings "has been no match for the insatiable housing demand."