Home prices hit record, up 18% in Suffolk, 12% in Nassau

Long Island home prices hit record highs last month, as low interest rates and the ongoing pandemic kept buyers locked in fierce competition.

In Suffolk County, homes sold for a median price of $473,500 in November, up 18.4% from a year earlier, the multiple listing service OneKey MLS reported Monday. Nassau County home prices jumped 11.9% annually, to a median $598,000.

The upward pressure on prices showed few signs of abating, with pending sale prices up year-over-year by 14% in Nassau and 16% in Suffolk, OneKey reported.

In Suffolk, home sales surged annually by 19% last month, while the number of homes going into contract increased by 21%. Nassau home sales increased by 31% and pending sales soared by 35%, compared with the previous November, the OneKey report shows.

"It’s been absolute mayhem," said Aaron Bates, a real estate agent with Century 21 American Homes in Syosset. "It's a lot of competition, very, very high demand. You have to be ready to go at asking [price] or over. … We've been coaching every single one of our buyers, if they're looking to buy in this market, that's what they have to be willing to do. And if not, then they're not ready to purchase."

On Sunday, an open house for a three-bedroom split ranch in Northport listed for $549,000 attracted more than 80 groups of buyers and generated four "aggressive" offers, Bates said. A four-bedroom home in North Babylon recently sold for $552,000, about $50,000 higher than the asking price – and $112,000 above the price paid by the homeowner three years ago, Bates said.

The furious pace of sales left few homes for buyers to choose from, with inventory down by 35% in Suffolk and 18% in Nassau, year over year. .

The low supply put sellers in a strong position in both counties. At last month’s pace of pending sales, selling all the homes on the market would take 2.4 months in Suffolk and 3.3 months in Nassau. That’s less than half the six- to eight-month supply that makes for a balanced market, according to brokers.

Long Island’s housing market has seen a massive surge of pent-up sales activity in the wake of the COVID-19 real estate shutdown, which imposed restrictions on in-person sales activity from March until June 10. In addition, an influx of buyers leaving New York City during the pandemic has led to intense demand for high-end homes in communities such as the North Shore of Nassau County and the East End.

Buyers also are seeking to lock in record-low interest rates, which has caused more competition for entry-level and midpriced homes, brokers say. The average mortgage rate was 2.71% last week, down 1.02 percentage point from a year ago, mortgage giant Freddie Mac reported last week.

"People are willing to pay the price because the rates are so low," said Tanya Lawrence, a real estate agent with Exit Realty Advantage in Baldwin. "If I were renting and I had the funds available for a down payment and my credit was great to get the low rates, I definitely would venture out to buy a home right now."

The increased activity has resulted in sales nearly catching up to where they were this time last year, said Jim Speer, CEO of OneKey. From January through November, the number of sales is down less than 4% in Suffolk and 9% in Nassau compared with the same period last year, despite the nearly three-month shutdown, OneKey figures show.

"Consumers do feel confident about buying homes right now," Speer said. "And now that there’s a vaccine out there … I do think there’s a good chance that will lead to more confidence."

For many workers, the ability to work from home has increased demand for suburban houses, though many workers do not yet know how often they will need to commute to the office once the pandemic ends, Speer said.

Some homeowners have been hesitant to list their properties, both because they worry about exposing themselves to the coronavirus and also because it can be challenging to find their next home, especially if they wish to stay on Long Island, Speer said.

Brokers said they hope the new vaccines will prompt more people to list their homes.

"People still are wanting to sell, they’re just putting a brake on it," Lawrence said. "They’re waiting for the vaccine, and they’re waiting for corona to die down."

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By Maura McDermott

maura.mcdermott@newsday.commauramcdermott

Maura McDermott covers education. Since joining Newsday in 2012, she also has worked on the investigations team and covered real estate and the business of health care.