At first glance, a snapshot of Long Island’s housing market, especially compared with the rest of the country, seems worrisome.
After all, Long Island’s home prices are significantly below their 2007 highs, according to a well-regarded index of housing markets. The rest of the country, meanwhile, has bounced back in full.
But that’s not necessarily bad news.
For a moment, recall Long Island’s housing landscape in 2007. The region seemed strong. Prices kept rising, sales were strong. Sellers constantly got more than they expected, buyers were happy to find homes and were thrilled at how easy it was to secure mortgages.
In June 2007, Suffolk County hit its high median price — $420,000. That August, Nassau County hit its ceiling, $502,500.
Voices of doubt and concern were there, but they weren’t loud and weren’t heard. Then in 2008, the bubble burst and the house of cards — built with subprime, or high-interest, loans, bad mortgages, unsustainable investments and fraud — tumbled.
Long Island was hit hard by that mess and its ripple effects, and it has taken a long time for our economy and housing market to climb back. Some say we still haven’t recovered completely.
So, here’s another way to look at it. This region should never return to the 2007 world of bubbles, easy lending and inflated home prices. It was economically dangerous to the communities across Long Island, especially as foreclosures dotted the landscape — and to so many Long Islanders who are, even now, still trying to rebound.
But even without returning to previous highs, there’s still promise and opportunity. Long Island can aim for a Goldilocks-style housing market in which buyers can afford to buy, sellers earn reasonable profits, and both economic growth and affordable housing construction are possible.
Right now, the region’s inventory of homes for sale is low, and sales are strong. That’s a combination ripe for lots of activity. Median prices now — $339,830 in Suffolk County, $470,000 in Nassau — continue to rise, even if the pace isn’t as robust as elsewhere.
Of course, it’s not all “just right.” High taxes, high costs and a mix of businesses that hasn’t produced a star job-creating industry in recent years could all contribute to Long Island’s slower comeback. Those are tough issues to control. But if prices here stay realistic and reasonable, that could be conducive to a healthy housing market and overall economy.
And that, in turn, presents an opportunity.
As booming prices in New York City and across the country make affordable housing elusive, Long Island could seize its chance and fill the void by opening the door to a variety of housing options both in cost and design that are in high demand by both older and young members of our communities.
And that could be a win far more important than any home price index would show. — The editorial board