Median LI home prices dip in February

The median price of home closings dropped to $354,300 last month, after a noteworthy upswing in January, the Multiple Listing Service of Long Island reported Thursday.

The figure was a 3 percent decrease from January's figure of $365,000, which had been the first time in more than two years that the median closing price was higher than a year ago, said the trade group, which also covers Queens. February's median closing price was a 1.6 percent dip from the year-ago price of $360,000.

Sales continue to surpass last year's, driven by low interest rates, a home buyer's tax credit that expires at the end of April, and a sense that the market is no longer in a death spiral, real estate agents said.

Deals on 1,544 homes closed last month, up from 1,161 a year ago, MLSLI said.

Oceanside-based broker Nancy Achstatter sees another prime reason for housing activity: loans insured by the Federal Housing Administration.

The FHA allows as little as 3 percent down and permits closing costs to be folded into the loan amount. According to lenders, in boom times most lenders didn't care to tackle all the paperwork and standards on FHA-backed mortgages, so they didn't make such loans. But in this tight credit market most lenders have jumped upon FHA-insured loans as lifelines for their business. This frees up lenders' capital so they can make more loans.

"FHA isn't the loan that people don't do anymore," said Achstatter, broker-owner of Home and Hearth Real Estate. "We're seeing FHA loans . . . on the majority of our deals.

"Closing costs can be 15 to 20 grand. It's not just that you have to put the money down, but you need the closing costs, and when you have to put in escrow $9,000, $10,000 for taxes, it takes a lot of money to move into the house," she said.