After losing two bidding wars on homes in the New Jersey suburbs, the third time was the charm for Sean Bursztyn, with a $760,000 offer on a Long Island property.
The 32-year-old, who grew up in Commack, had been renting an apartment in a high-rise building in Long Island City, Queens, when the pandemic struck in March.
In May, wanting more room for his growing family, and concerned about New York City’s rising COVID-19 infection rate, Bursztyn started shopping for homes online. He considered Long Beach, Manhasset and Roslyn before settling on the Town of Huntington.
The three-bedroom expanded Cape he found was the first new listing since the spring lockdown for Debra Russell, a licensed real estate salesperson at Daniel Gale Sotheby’s International Realty in Cold Spring Harbor.
Russell had asked the sellers to wait to list their home until June 17, after lockdown ended and live open houses were permitted, "so we could actually show the house in person," she said.
‘It was craziness’
"From the moment we listed it, it was craziness," Russell recalled. About 60 people, broken up in groups of two, waited up to 45 minutes for the open house walk-through, conducted under pandemic protocols. That led to a half-dozen offers for the one-acre property, which had undergone a recent upgrade, including bathrooms, kitchen, heating and siding, she said.
Bursztyn prevailed with a bid that was $39,000 over the asking price and moved into his new home in August.
His advice to others competing to buy on Long Island: "In this type of market you have to be over-the-top aggressive."
Over-the-top bidding wars have been erupting and breaking records across Long Island as the market recovers in gangbusters style from the spring lockdown to stem the spread of the coronavirus, experts said.
Once socially distanced open houses were permitted again, prospective buyers were actually eager to wait hours on long lines for walk-throughs of homes in Patchogue, Brentwood, Uniondale and other communities, agents said. In many cases, sellers have been pleasantly shocked to see bids up to $100,000 over asking prices, agents said.
"This is like nothing I’ve ever seen before," said Russell, who has been brokering Long Island home sales since 2006. Russell said that she also sold a Centerport house that closed in September for $95,000 over the asking price.
"Right now, Long Island is booming," said Jonathan J. Miller, president/CEO of Miller Samuel Inc. Real Estate Appraisers and Consultants. "The current rate of sales is frenetic, and the pace is the fastest moving market that we’ve tracked since 2003."
These 135 LI homes all sold $50G or more over ask
You can also search this table by typing in a Long Island community name into the space below.
Source: Compiled by Miller Samuel
The Long Island housing market "set a record number of records" in terms of sales prices in the third quarter, from July 1 through Sept. 30, Miller said. He compiled a list of 135 homes in Nassau and Suffolk that sold at $50,000-$275,000 above ask since June.
Excluding the South and North Fork, "the overall median and average prices were the highest on record, and inventory [the number of homes for sale] was the second lowest on record" after the first quarter of 2020, he said.
Trifecta fuels boom
Miller said three factors combined to create the overheated real estate market: 3% mortgage rates, record low inventory and "pent-up demand because we didn’t have a normal spring market," Miller said. "The surge in sales met limited supply, which created rising or record prices."
There are downsides to the skyrocketing prices, experts said.
They could mean higher tax bills in the future. "Since property taxes are derived from property values, it helps drive taxes higher," Miller said.
Also, first-time homebuyers could find it harder to land a deal. Peter Elkowitz, president and CEO of the Long Island Housing Partnership, which helps first-time homebuyers with down payments, said, "If you are trying to buy an affordable home, it becomes much more difficult in the open market because you are competing against people that are throwing money at a home."
Tammy Abreu and her mother know. It took the 30-year-old Manhattan public high school teacher and her 53-year-old mother, a hospital worker, more than a year to find and buy an affordable home here.
Longtime Long Island apartment dwellers who most recently rented in Baldwin, they had been searching online for houses since August 2019, but found them selling within 12 to 24 hours of being listed, Abreu said. In May, after counseling by the partnership, they made an offer on a Copiague house but withdrew after a bidding war developed with a cash buyer, Abreu said.
On their third try, in August, they won out with an offer of $437,000 — $7,000 above the asking price — on a four-bedroom high ranch in Copiague.
"There is no way to get a house if you offer less [than the asking price] on it," in the current market, Abreu said. "You have to offer more."
Many agents agree. Hector Villatoro has seen stiff competition for properties his firm sells across Long Island, predominantly in Brentwood, Central Islip, Deer Park and Babylon.
"We’re getting more than 10 offers on every house," said Villatoro, a licensed real estate broker and owner of ARVY Realty of Brentwood. Many buyers are city dwellers who have switched to working from home since the lockdown and are seeking more living space, agents said.
Multiple offers, long lines
Delmy Blanco, a real estate salesperson with Coldwell Banker in Mount Sinai and Westhampton Beach, represented a number of buyers from Queens and Brooklyn seeking to buy homes in Brentwood, Bay Shore, Central Islip, Port Jefferson Station and Selden. She said bidding has driven prices from $20,000 to $50,000 over ask.
"The seller receives 10 or 20 offers and at the open houses we usually have to make a big line to have access to the property," Blanco said.
How long will this homebuying exuberance last?
Russell said some buyers seem to be "thinking a little bit more, like they are saying, ‘I’m not going to pay COVID prices.’ They’re not as emotional as they were two months ago."
"We don’t know when this is going to be over," Miller said, adding that "many companies are extending their return to work until next summer, which seems to be about the time experts are predicting a vaccine resolution."
But for Villatoro, who has been selling homes since 2002, the boom has a familiar ring.
"I saw something similar in 2005, 2006 and 2007, and you know what happened," he said, referring to the 2007-09 recession that saw real estate prices crash.