A scant supply of Long Island listings and near-record-low interest rates drove up home prices last month.
In Suffolk County, homes sold for a median price of $405,000 in October, up 5.2% from a year earlier, the Multiple Listing Service of Long Island reported. Nassau County home prices increased by 2.4% annually, to a median $537,500.
The number of closed home sales in Suffolk dropped by 10% compared with the previous October, the listing service reported. In Nassau, closed sales ticked up year-over-year by 2.6%.
In both counties, it would take less than 4 ½ months to sell all the homes listed at the current selling pace, less than the six- to eight-month supply that brokers say creates a balanced market. Compared with a year earlier, the number of listings dropped by 2.6% in Suffolk and rose by 3% in Nassau.
Mortgage rates averaged 3.75% last week, down about 1.2 percentage points from a year earlier, mortgage giant Freddie Mac reported.
The decline in interest rates has given first-time buyers more purchasing power, but those buyers face plenty of competition, said Barbara Wanamaker, associate broker with Prime Properties Long Island in Huntington.
“There is still not enough inventory, especially for the first-time buyers,” Wanamaker said.
Wanamaker said she worked with a couple who have been renting in Brooklyn and shopping for a home in Huntington. They made an offer on a Huntington home and the seller accepted it, but before the home went into contract the seller received a higher offer and rejected the couple’s bid, Wanamaker said.
When the pair found another home, this one priced at $499,000, they bid $10,000 over the asking price because they didn’t want to lose out again, she said.
For homes priced under about $600,000, she said, “that’s the way the world works these days in real estate.”