Long Island home prices post biggest gain in 10+ years
Long Island home prices posted their biggest gains in more than a decade at the end of last year, with increases throughout the region as buyers competed for scarce inventory.
The median home price on Long Island, excluding the East End, rose year-over-year by 6.6 percent in the last three months of 2017, to $415,000. The gain was the biggest annual increase since 2006 and the 19th straight quarter of yearly gains, a report to be released Thursday by the brokerage Douglas Elliman and the appraisal company Miller Samuel shows.
In the Hamptons, the median price rose to $995,000, an annual increase of 7.6 percent. North Fork home prices ticked up by 0.4 percent, to $597,500.
The number of homes listed for sale in Nassau County and western Suffolk County fell by 6.7 percent, to 10,273.
There has been “a flurry of first time home buyers coming in, and with so little inventory it’s really been pushing that segment up,” said Ann Conroy, president of Douglas Elliman’s Long Island division.
First-time buyers and baby boomers are favoring homes near downtowns in communities such as Patchogue and Huntington, seeking restaurants, cultural activities and transportation, Conroy said.
“It’s a new Long Island, the attitude has changed,” she said.
The price increases come as buyers and sellers try to figure out what the tax overhaul enacted last month will mean for the local real estate market.
The measure increases the standard deduction and imposes a $10,000 limit on tax deductions for state and local taxes, including property taxes. It also sets a $750,000 cap on mortgage debt eligible for interest deductions. Some local brokers and accountants predict it could lead some buyers to favor lower-cost homes.
“The buyers are using it as leverage, or as a means to try to get the price down,” Conroy said.
Even so, she said, “I don’t see any slowdown in activity.”
Median prices increased in both counties and along the coasts — particularly along Nassau’s South Shore, where the median price jumped by 8.2 percent annually, to $460,000. In the aftermath of superstorm Sandy in 2012, “people just didn’t want to buy there, or they were concerned about buying there,” but that is no longer true, Conroy said.
Overall, western Suffolk County saw slightly bigger gains than Nassau, with prices rising by 7.7 percent year over year, to a median $350,000. In Nassau, the median price was $495,000, 6.5 percent higher than a year earlier.
In the Hamptons, sales were “very robust,” with an influx of first-time home buyers seeking out lower-priced homes, but fewer sales of $5 million or more, and no sales over $30 million, said Ernest Cervi, regional senior vice president of Corcoran’s East End offices.
Despite the strong demand throughout the Island, homeowners have been in no rush to list their properties, since the consistent increase in prices “sucks out the urgency to sell as owners try to time the market,” hoping to fetch the highest possible price, said Jonathan Miller, president of Miller Samuel.
Plus, he said, some homeowners may not have enough equity to justify selling: “They don’t have enough for the down payment or to qualify for the mortgage on the next home.”