Long Island home sales pick up steam in July even with prices near highs

The average Long Island homeowner sold their house for more than their asking price in July, as a shortage of listings put pressure on buyers.

The median sale price in Suffolk County matched the all-time high of $750,000 for single-family homes, rising 7.1% compared with July of last year, according to new data released by OneKey MLS Thursday.

In Nassau, the median increased 2.9% from the same month a year ago to $880,000. That was slightly below the record high of $890,000 set in May.

In both counties, the average seller received a premium on their list price.

In Suffolk, the average single-family home went for 102.6% of a seller's asking price, while the average was 101% in Nassau. Before the pandemic, it was more common to see the average home sold at a slight discount to its asking price, but in the past few years, sales above asking price have become far more common.

Mia Pizzo, an agent with Howard Hanna Coach Realtors in Northport, listed a high-ranch for $675,000 that closed in June earlier this summer at $780,000.

She suspects buyers who have been frustrated by missing out on other homes are losing their patience.

"They've lost the 10th house and they refuse to lose the 11th, so they're coming in very aggressive," Pizzo said. "That kind of seems to be the trend."

Long Island is among the real estate markets in the Northeast that have been outperforming the rest of the country.

The 2,023 closings last month were 5.4% higher than last July's transactions.

Nationwide, sales of existing single-family homes in July rose just 0.8% from a year ago. The Northeast market showed the strongest price growth, at 5.5% compared with July last year, while the national rate was just 1.9%, the National Association of Realtors reported earlier this week.

"In the Northeast and Midwest, we're seeing a lot more tightness and homes are selling faster. Prices are still going up," said Danielle Hale, chief economist at Realtor.com. "That's not the case nationwide. In some markets, prices are going down."

Mortgage rates have climbed since July, and could slow down the housing market in the coming months, as buyers face higher monthly mortgage payments, Hale said.

The average 30-year fixed rate was 6.67% during the week ending Thursday, which was the highest it's been since last summer, according to Freddie Mac.

"We're getting to the point where I think mortgage [rates] are going to exert more of a brake on the housing market," she said.

A shortage of homes on the market has driven up prices.

There were about 5,400 houses on the market on Long Island at the end of July, which was down 6.7% compared with the same point a year ago. The region also has fewer than half as many homes on the market as it did in July 2019.

"We've just been caught in this cycle of low inventory and high buyer demand," said Richard Haggerty, CEO of OneKey MLS, the multiple listing service covering Long Island. 

Inventory has been slow to rise in places like Long Island because so many homeowners have low mortgage rates, which means moving would increase their monthly housing cost.

Nationwide, about half of outstanding mortgages have a rate of 4% or less and about two-thirds of mortgages carry a rate of 5% or less, according to a Realtor.com analysis of federal mortgage data.

The market favors sellers, said Barbara Catapano, a real estate agent at Branch Real Estate Group in Bayville, but homeowners who price homes too high could still need to make adjustments. 

It can be challenging to find homes priced below $1 million in parts of the North Shore, such as Glen Head, where Catapano and agent Michelle Rich recently co-listed a three-bedroom, one-bathroom ranch for $888,000. 

"Something's got to give because I feel so bad for these young buyers who are trying to get into areas [where] it's almost impossible" on the North Shore of Long Island, Catapano said.

Pizzo, the Northport agent, said homeowners looking to upgrade or downsize have been hesitant to give up an attractive mortgage rate and become buyers in a competitive market.

"The biggest fear that exists is, 'My house is going to sell in a weekend but then where do I go?' "