These 6 Long Island communities saw home prices skyrocket in 2023

Last fall, the average mortgage rate rose to its highest level since 2000. Long Island homebuyers were unfazed.

Home prices surged in the vast majority of communities, as the available supply of for-sale properties fell to its lowest level in 40 years in December.

In the second half of last year, 83% of Long Island communities with at least 25 sales saw home prices increase compared with the same six-month stretch a year earlier, according to the latest comprehensive data on nearly 200 communities across Long Island — excluding the Hamptons and North Fork — prepared for Newsday by appraisal firm Miller Samuel. 

The median price in Bayville, Albertson, East Moriches, Woodbury, Copiague and Babylon median prices rose the fastest among areas where there were at least 25 sales from July to December.

“Even in a world where the 30-year fixed rate at the end of last year was approaching 8%, that didn’t seem to matter because the inventory shortage was so overpowering,” said Jonathan Miller, CEO of Miller Samuel.

That shortage — and the accompanying competition for housing — has persisted this year despite mortgage rates have stayed about 7%, making purchases even less affordable. Median prices among single-family home sales in both Long Island counties set records in May, at $790,000 in Nassau and $651,000 in Suffolk, according to data from OneKey MLS, the multiple listing service, which covers Long Island.

There was a glimmer of hope in OneKey’s latest data with the number of houses for sale in Suffolk County increasing by 8% at the end of May compared with the previous year. Nassau buyers had no such luck as they had 17% fewer homes to choose from than a year ago.

Nationwide, the number of single-family homes on the market is up 38% in late June compared with last year, as more sellers emerge in Florida, Texas and California, said Mike Simonsen, founder and president of Altos Research, a San Francisco-based real estate analytics firm. 

On Long Island, Simonsen said a lull in homes hitting the market last summer contributed to higher prices but more properties were starting to become available.

“You could see inventory was not climbing this time last year, and it is climbing this time this year,” Simonsen said. “That's why I'm pretty confident to forecast that even in Nassau County inventory will be up year-over-year, in a couple of weeks.”

But Long Island still has a ways to go to address the depleted supply of homes caused by rock-bottom interest rates and greater demand for suburban homes during the pandemic, Miller said.

“I see this as a many-year process. Because rates were held too low for too long, inventory was obliterated,” Miller said. “It’s not going away unless there’s a sharp drop in [interest] rates, which is hard to imagine when unemployment remains low.”

Here are the six places where prices surged the most in the second half of 2023:

Bayville

Median price second half of 2023: $822,000

Median price second half of 2022: $635,000

Jean Mansueto, an associate broker at Branch Real Estate Group, is selling homes to a third generation of buyers in Bayville since she started in 1971 — and they may have never faced such a challenging environment.

In mid-June there were just six houses on the market, ranging from $699,000 for a two-bedroom to $2 million for a four-bedroom high ranch. Mansueto remembers times when 50 to 60 listings — ranging from bungalows to waterfront mansions — might be available.

The increase in remote work is one factor that may have boosted Bayville’s median price, as more buyers place a premium on being able to walk to a coffee shop or the beach, said Jennifer DeSane, director of marketing at Branch Real Estate Group.

Of course, swings in median price can also reflect a shift in the mix of homes that sell during any one period, especially in a small village like Bayville, which recorded 29 sales during the last six months of 2023.

The village, which is surrounded by Long Island Sound and Oyster Bay Harbor, attracts a set of buyers determined to live there, Mansueto said, and they tend to partake in the “Bayville shuffle,” with young families gradually moving up to larger homes. They’re also drawn to Locust Valley schools.

“A lot of the families coming here are looking for a bigger house and they found that this is the place to be, and it’s great for their children,” Mansueto said. “They put a value on the lifestyle, not on the number.”

Albertson

Median price second half of 2023: $937,000

Median price second half of 2022: $754,000

With its tree-lined streets, and a mix of Capes, Colonials and ranches, Albertson saw the second-highest increase in its median price in the second half of 2023.

Like Bayville, Albertson had 29 sales during the six-month period. Earlier this week, the 11 homes on the market in Albertson ranged from a $649,000 two-bedroom Cape to a nearly 3,000-square-foot house asking almost $1.9 million.

“In the Albertson market, you could get a million dollars, but it’s obviously going to depend on the size of the home,” said Mark Debrich, a real estate agent at Weichert Realtors in Farmingdale, who is marketing a Cape priced at $699,000 in Albertson.

The hamlet is split between school districts, including Mineola and Herricks, which also can lead to variation in home prices, he said.

Albertson lacks many major thoroughfares, so neighborhoods tend to be quieter, Debrich noted. The area also has the 12-acre Clark Botanic Gardens.

Given how few homes are available and the pace new listings are going into contract, Debrich said homebuying in the area would remain competitive.

“I think it’s going to be pretty steady,” he said. “I don’t see the prices declining in the area.”

East Moriches

Median price second half of 2023: $779,000

Median price second half of 2022: $650,000

Buyers are finally appreciating East Moriches the way locals like Corcoran associate broker Letticia Lettieri long have.

Lettieri said buyers interested in Westhampton Beach often found they could get more for their money in East Moriches — with less congestion.

“They can come here and get a much larger home with a much larger piece of property,” she said.

Lettieri believes longtime owners are holding on to homes because their children and grandchildren need a place to stay while they tried to find an affordable place to live. 

“It’s expensive to live on Long Island between the home prices and the taxes, and people want to stay close to their kids to help them out,” she said.

Kevin Loiacono, broker and owner of BrookHampton Realty in Center Moriches, said boaters in East Moriches could travel to restaurants from Fire Island to Westhampton Beach by navigating the South Shore’s bays.

“East Moriches was a little undervalued and quickly caught up,” Loiacono said.

The market has eased from the frenzy of the past few years, Loiacono said, though he doesn't anticipate home prices stalling out. 

“For the foreseeable future, you’re not seeing a glut occur,” Loiacono said. “In other times, we’ve watched bad markets in foreclosure eras, [buyers] were in over their heads on their house. A lot of people who purchased in the last few years are just not in over their heads.”

Woodbury

Median price second half of 2023: $1,325,000

Median price second half of 2022: $1,125,000

Woodbury was already among the Island’s million-dollar communities, but prices for the area’s mix of houses and condos still rose at one of the fastest clips in the region.

Buyers are drawn to Woodbury from Queens and Manhattan because it’s located within the Syosset school district, which is among the top rated in the country, said Ira Gross, an associate broker and Tim Lau, an agent, at Daniel Gale Sotheby’s International Realty in Woodbury.

About three-fifths of the sales during the period were houses and the rest were condos.

Other draws in Woodbury include the 46-acre Syosset-Woodbury Community Park and Town of Oyster Bay Golf Course, Gross said.

Lau said the shortage of available homes and new construction sales contributed to the rise in median price.

As of mid-June there were 19 houses and 12 condos on the market in Woodbury.

“We’re finding a greater shortage in condos,” Gross said. “A lot of doctors, attorneys use condos as a steppingstone because they want the schools and eventually within a five-to-seven year range sell it and trade up. But those younger people don’t want to give up their 3% [mortgage rate] and buy something now at 7%.”

Ian Azouz, 39, and his wife, Dr. Patricia Mena, 41, searched for two years while renting in Huntington before finding a condo in Woodbury. It was their third offer after being outbid on two others in the same condo community in Woodbury, which they were drawn to because it’s within the Syosset school district.

The low number of houses on the market meant they had few options. Azouz, sales director at wedding venue Westbury Manor, said moving quickly and working with Lau and Gross, who knew the community well, was key to finding their new home, which they moved into earlier this month. He declined to share the purchase price.

“We would go to see a $700,000 condo and everything would need to be done. We would have had to spend $700,000 more just doing renovations, and it would not be the place we wanted or the school district we wanted,” said Mena, a pediatrician for Northwell Health. “It was discouraging. Every day we got outbid we said we would never be able to get the house we want and that we’ve worked our whole lives for.”

“It worked out. It has a good ending,” Azouz added.

Copiague

Median price second half of 2023: $550,000

Median price second half of 2022: $467,500

Copiague is the most affordable area among those where prices are rising the fastest.

Anna Tambasco, owner and broker at Advantage Plus Realty and a Copiague resident, said the hamlet’s Tanner Park, which includes a bay beach, spray park and band shell that hosts concerts, was a draw to the area. The park also hosts the annual Long Island Family Festival.

Tambasco sold one house recently for $670,000 she estimated wouldn’t have sold for $570,000 two years ago. She said the market had been most competitive for houses priced around $500,000.

“There’s no inventory, so everyone is overbidding,” Tambasco said.

Janice and David Fanara, of Floral Park, visited an open house in Copiague held by Tambasco last weekend that checked many of their boxes — a three-bedroom home on the water with space for their two dogs to play, in the backyard.

Janice Fanara, 56, a neuroscience professor at Queens College, said the couple’s home search, which began in March, had been “hit or miss.” Several homes they’ve visited haven’t measured up to photos online and some sellers have unrealistic expectations. One expected the couple would waive the appraisal contingency, which allows a buyer to walk away from a deal if a house’s appraisal value falls short of the proposed price.

“It’s so nuts out there that people are starting to do things that are outlandish,” she said.

Tambasco said she feared that today’s high prices were not sustainable and buyers who planned to purchase and move again in the next couple of years could be in trouble.

“Buying at the high prices, you have to be careful,” she said. “If you’re staying here, you’re all right if the market goes down and up again. If you're looking to move in a couple of years, you might owe money, especially if you’re putting 3% down.”

Babylon

Median price second half of 2023: $705,000

Median price second half of 2022: $602,500

Mustafa Uruk, a real estate agent at Exit Realty Island Elite who leads the Estate Kings team, recently listed August Lentricchia’s four-bedroom Colonial in Babylon at $600,000. About 50 sets of buyers toured the nearly century-old house over four days, and Lentricchia said he had about 10 offers to choose from.

Lentricchia, 70, who bought the house 36 years ago, has a vacation home with his wife in the Poconos and plans to rent in or near Babylon, he said. Plus, he wanted to see a family move into the house where his four children grew up.

“I don’t want to take care of two houses,” said Lentricchia, an investment adviser at Freedom Tax and Wealth Management in Holbrook. “If I work, I want to spend time away from work having fun.”

Uruk said the village’s parks, walkable downtown and proximity to beaches had attracted young people to the area.

He believes the trend since the pandemic of buyers waiving appraisal contingencies has contributed to the pace of appreciation. When a buyer waives an appraisal contingency, they commit to buying a home even if its appraisal value is lower than the purchase price.

With more buyers paying above asking price and waiving appraisal contingencies, prices have been moving up faster, Uruk said. Then, those sales are factored in when the next seller puts their home on the market, providing a basis for a loftier asking price.

“This enables home prices to go higher and higher,” Uruk said. 

Of course, homes on Long Island are worth what buyers are willing to shell out. In recent years, that number has seemed to increase by the day.

Andy Moncada, a real estate agent at eXp Realty who has sold several homes in Babylon, said he had found homeowners were often interested in testing the market but reluctant to give up their current monthly payment.

“Homeowners are saying, ‘I’m not going to sell if I don’t get my price,’ ” he said.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

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.