Long Island home prices boosted in November by buyers' lack of options
Home prices have fallen compared to record levels earlier this year. But competition is still fierce, driven by low inventory and sellers hesitant to get "off the sidelines," said one real estate expert. Credit: Newsday/Steve Pfost
For Long Islanders with a home on their holiday shopping list, there were dwindling options to choose from at the end of November, even as prices dipped slightly from record highs earlier this year.
The median price among single-family homes sold in Nassau County last month was $775,000, down from $795,000 in October, according to data released Monday by OneKey MLS, the multiple listing service that covers Long Island.
The median price in Nassau increased 6.9% last month, compared with November 2023. Price changes are typically measured on a year-over-year basis to account for seasonal trends in homebuying.
In Suffolk, the median price last month was $651,000, or 4.7% more than the same figure a year earlier. The median fell from $670,000 in October.
Prices continue to rise compared with the previous year because there isn’t a sufficient supply of homes available to keep up with demand, said Richard Haggerty, CEO of OneKey MLS. The rise in mortgage rates over the past few years has also locked homeowners into staying put to hold onto their ultra-low rates.
“The two major drivers are low inventory and the inability to get sellers off the sidelines,” he said.
Data on the supply of homes shows a sharp slowdown in new homes coming on to the market in November and fewer homes for sale than at the same time a year ago. That means buyers' fortunes aren't likely to substantially improve in the coming months.
Across Long Island, there were 4,078 single-family homes on the market at the end of November, down 13% from a year ago when the supply was already low.
A lack of inventory has contributed to sluggish sales volume over the past year. The number of single-family home sales fell 7.5% in Nassau County, compared with November 2023.
Suffolk County had better results, with an 11.2% year-over-year increase in the number of sales.
The shortage of houses has sustained competition among buyers, said Gail Carillo, an associate broker who leads a team of agents at Coldwell Banker American Homes in Ronkonkoma.
She advises buyers to shop below their budget to give themselves the best chance to get their offers accepted.
More real estate agents have adopted what Carillo calls “compelling pricing” — asking for a lower price than they expect the house to sell for to entice the greatest number of potential buyers. But homeowners still expect offers above their asking price to secure the deal, she said. For example, a buyer who can afford to spend $500,000 is better off looking at $450,000 homes with the expectation they will need to offer above the asking price.
“It allows you to be more competitive in a competitive market and to have a better chance of minimizing loss," she said. "Because that’s what’s been happening and it’s been burning out buyers.”
Carillo said she has recently noticed houses getting fewer offers from buyers and sitting on the market for longer, compared with earlier in the year. But the scarcity of available houses means sellers still have an edge, and that won’t change until more people put their homes up for sale, according to the broker.
“Until we have more housing, those conditions are going to exist,” Carillo said.
Higher mortgage rates have also hurt affordability for buyers. When the Federal Reserve cut its benchmark interest rate in mid-September, some in the real estate industry believed that the cost of a home loan would drift lower.
But the average 30-year fixed rate rose steadily through the fall before dipping over the past few weeks to 6.6% for the week ending Thursday, according to mortgage giant Freddie Mac.
That’s more than double the average rate three years ago, when a borrower could take out a long-term mortgage for about 3.1%, according to Freddie Mac.
The Fed will announce its next policy decision Wednesday and is expected to signal fewer rate cuts next year than investors had previously expected.
Beyond mortgage rates, older homeowners who have paid off their houses say they are reluctant to uproot themselves from their longtime homes, said Nicole Burke, a real estate agent at Charles Rutenberg Realty in Plainview who sells homes in Nassau and Suffolk counties.
“When I speak with older people, [they say], ‘Why sell when everything's here?’ ” she said.
Burke said the holiday season can provide an opportunity for buyers because there are fewer competitors browsing homes and the sellers who list at this time tend to be motivated to reach a deal quickly.
Buyers "may be able to get into a house with not as much pressure, not as many other buyers looking to drive up that price, being that the supply is low," she said.
For Long Islanders with a home on their holiday shopping list, there were dwindling options to choose from at the end of November, even as prices dipped slightly from record highs earlier this year.
The median price among single-family homes sold in Nassau County last month was $775,000, down from $795,000 in October, according to data released Monday by OneKey MLS, the multiple listing service that covers Long Island.
The median price in Nassau increased 6.9% last month, compared with November 2023. Price changes are typically measured on a year-over-year basis to account for seasonal trends in homebuying.
In Suffolk, the median price last month was $651,000, or 4.7% more than the same figure a year earlier. The median fell from $670,000 in October.
WHAT NEWSDAY FOUND
- The median price of a single-family home rose 6.9% in Nassau County and 4.7% in Suffolk County last month, compared with November 2023.
- Prices have cooled off from record highs set earlier this year, which is typical for the Long Island real estate market during the colder months.
- Real estate agents said the low number of houses for sale is still causing competition. But buyers may have an opportunity to avoid competing with other offers if they purchase during the holiday season, when some people suspend their searches.
Prices continue to rise compared with the previous year because there isn’t a sufficient supply of homes available to keep up with demand, said Richard Haggerty, CEO of OneKey MLS. The rise in mortgage rates over the past few years has also locked homeowners into staying put to hold onto their ultra-low rates.
“The two major drivers are low inventory and the inability to get sellers off the sidelines,” he said.
Data on the supply of homes shows a sharp slowdown in new homes coming on to the market in November and fewer homes for sale than at the same time a year ago. That means buyers' fortunes aren't likely to substantially improve in the coming months.
Across Long Island, there were 4,078 single-family homes on the market at the end of November, down 13% from a year ago when the supply was already low.
A lack of inventory has contributed to sluggish sales volume over the past year. The number of single-family home sales fell 7.5% in Nassau County, compared with November 2023.
Suffolk County had better results, with an 11.2% year-over-year increase in the number of sales.
The shortage of houses has sustained competition among buyers, said Gail Carillo, an associate broker who leads a team of agents at Coldwell Banker American Homes in Ronkonkoma.
She advises buyers to shop below their budget to give themselves the best chance to get their offers accepted.
More real estate agents have adopted what Carillo calls “compelling pricing” — asking for a lower price than they expect the house to sell for to entice the greatest number of potential buyers. But homeowners still expect offers above their asking price to secure the deal, she said. For example, a buyer who can afford to spend $500,000 is better off looking at $450,000 homes with the expectation they will need to offer above the asking price.
“It allows you to be more competitive in a competitive market and to have a better chance of minimizing loss," she said. "Because that’s what’s been happening and it’s been burning out buyers.”
Carillo said she has recently noticed houses getting fewer offers from buyers and sitting on the market for longer, compared with earlier in the year. But the scarcity of available houses means sellers still have an edge, and that won’t change until more people put their homes up for sale, according to the broker.
“Until we have more housing, those conditions are going to exist,” Carillo said.
Higher mortgage rates have also hurt affordability for buyers. When the Federal Reserve cut its benchmark interest rate in mid-September, some in the real estate industry believed that the cost of a home loan would drift lower.
But the average 30-year fixed rate rose steadily through the fall before dipping over the past few weeks to 6.6% for the week ending Thursday, according to mortgage giant Freddie Mac.
That’s more than double the average rate three years ago, when a borrower could take out a long-term mortgage for about 3.1%, according to Freddie Mac.
The Fed will announce its next policy decision Wednesday and is expected to signal fewer rate cuts next year than investors had previously expected.
Beyond mortgage rates, older homeowners who have paid off their houses say they are reluctant to uproot themselves from their longtime homes, said Nicole Burke, a real estate agent at Charles Rutenberg Realty in Plainview who sells homes in Nassau and Suffolk counties.
“When I speak with older people, [they say], ‘Why sell when everything's here?’ ” she said.
Burke said the holiday season can provide an opportunity for buyers because there are fewer competitors browsing homes and the sellers who list at this time tend to be motivated to reach a deal quickly.
Buyers "may be able to get into a house with not as much pressure, not as many other buyers looking to drive up that price, being that the supply is low," she said.
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
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