Long Island home prices rose in September as buyers competed for a low inventory of homes for sale.
The median home price in Suffolk County rose 6 percent last month compared to the same period a year earlier due to increased demand from new home buyers and constraints on inventory.
Suffolk’s median sales price was $381,500 in September, up from the $360,000 median price a year earlier, the Multiple Listing Service of Long Island reported Thursday.
In Nassau County the median price was $525,000, representing a nearly 3 percent increase over the previous September.
The biggest factor driving Suffolk's price increases has come from a lack of suitable inventory, said Melanie Mazzeo, a real estate agent with Douglas Elliman in Huntington.
"If there’s low inventory and there’s more buyers looking, buyers are going to up-bid on a property,” said Mazzeo, who recently sold a home for $55,000 over the asking price.
Concern over rising interest rates in the past year has brought hesitant first-time buyers "back in off the fence," Mazzeo said. Compounding the demand is the inability of older homeowners to find smaller, affordable rental options that would allow them to downsize.
"They look to downsize but don’t have many choices to stay on Long Island," she said. "They really don’t have too many options or places to go.”
The number of Suffolk homes sold in September was down 11.2 percent at 1,415, compared with 1,593 home sales closed during the same period last year.
In Nassau the drop in sales was steeper at 15.1 percent; 991 homes were sold in September, down from the 1,167 sold last year.
Gary Baumann, a broker who works with homeowners in Nassau with Douglas Elliman's Plainview office, said first-time home seekers who waited to buy now have more money to invest.
"A starter home has a much bigger range than it used to because people were waiting a little longer to buy, so now they have a little bit more money,” Baumann said.
Moreover, the number of people buying homes as an investment and not a primary residence has grown. As they renovate and resell the homes at higher prices, fewer entry-level homes are available, Bauman said.
“As the real estate market has been improving, the builders and the flippers have gotten back in,” he said.