Long Island home prices rose to record high of $705,000 in the first quarter

Long Island home prices set records in the first quarter, as competition for homes pressured buyers to pay above asking price in about half of all sales.

Meanwhile in the Hamptons, the median price rose above $2 million for the first time in the first quarter.

The median sale price on Long Island, excluding the East End, was $705,000 during the winter months, or 11.9% higher than during the January-to-March period a year ago, according to data released Thursday by real estate brokerage Douglas Elliman and appraisal firm Miller Samuel.

Sales that closed during the quarter predate President Donald Trump’s major tariff announcement on April 2 and the subsequent drop in consumer confidence. But real estate experts said the lack of available homes on Long Island is likely to continue to prop up prices this spring.

"The market has a lot of momentum in the context of pricing, and supply is not there," said Jonathan Miller, CEO of Miller Samuel. "So it's hard to imagine that we don't see a continuation of this pattern, meaning restrained sales, higher prices and low inventory going into the spring market."

The number of listings has risen from December, when for-sale listings reached their lowest point since at least 2003. But there are still fewer than half as many homes for sale as there were five years ago.

"We’re still in a place where we have far more buyers than we do sellers," said Todd Bourgard, Douglas Elliman’s CEO for Long Island, Hamptons and North Fork.

Mortgage rates also haven’t fallen significantly enough this spring to encourage homeowners to make a change. The average 30-year fixed mortgage rate was 6.83% during the week ended April 17, according to Freddie Mac, while the average U.S. homeowner has a mortgage rate of about 4.1%, according to property data firm Cotality.

More listings have been emerging over the past few weeks, but there still aren't enough to satisfy interested buyers, meaning the trend of multiple offers on homes will likely continue, said Yadlynd Cherubin, an associate broker who leads a team of agents at Keller Williams Greater Nassau in Garden City.

About 54% of homes sold on Long Island, excluding the East End, went for above asking price in the first quarter, Miller said. That compares with about 23% five years ago. 

The shortfall of listings has led to fewer transactions overall. There were 4,128 home sales in the first quarter on Long Island, excluding the East End. That's only slightly below the same figure a year ago, but is 26% lower than the average for the first quarter during the past decade.

Prices climbed fastest in one of the region’s most expensive areas. The median price on the North Shore of Nassau County rose about 20% to about $1.4 million. On the South Shore in Nassau, the median rose 15% to $759,000, compared with the same quarter a year ago. 

Overall, in Nassau, the median price was $805,000 during the first quarter. The report covers sales of one- to three-family homes and condos.

In Suffolk County, the median increased to $630,000 during the three-month period. The median price on Suffolk’s North Shore increased about 13% to $720,000, compared with the same quarter a year ago. On the South Shore of Suffolk, the median price increased about 9% to $600,000.

In the Hamptons, the median deal sold for $2,040,000, an increase of 13% from the previous year.

Miller said the Hamptons real estate market received a boost from rising fortunes on Wall Street last year. The average bonus paid to Wall Street employees rose by nearly one-third last year to almost $245,000 and the securities industry in Manhattan saw profits rise 90%, Newsday previously reported. 

"This market is joined at the hip with the securities industry in New York," Miller said of the Hamptons market. "When you have record bonuses per person, that’s going to drive demand."

On the North Fork, the median price fell 5% to $945,000, compared with the same quarter a year ago, among 105 sales. 

Long Island stands out compared with the rest of the country. Nationally, the number of for-sale homes has been rising, and home prices have started to grow more slowly, said Chen Zhao, head of economics research at real estate brokerage Redfin. Long Island and other Northeast markets have seen stronger price appreciation this year than some Sun Belt areas, particularly in Florida and Texas.

"For Long Island, it looks like median sale price growth is quite a bit higher than the country as a whole," she 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.