Long Island home prices increased 66% since 2013

The median sale price of a Long Island home last year was nearly two-thirds higher than it was in 2013, with homes in the Hamptons and on the North Fork showing even faster growth.

The median sale on Long Island in 2022 went for $600,000, or 66.2% more than the median in 2013, when the comparable figure was $361,000, according to a new report from real estate brokerage Douglas Elliman and appraisal firm Miller Samuel. The firms report Hamptons and North Fork sales data separately from the rest of the Island.

In Nassau County, the median rose 63.6% during the decade to $679,000. In Suffolk, excluding the East End, the 10-year growth rate was 71%, reaching $530,000 last year.

By comparison, the rate of inflation for all items, excluding shelter, increased by 19.2% during that 10-year period in the 25-county New York metro area that includes Long Island, according to data from the Bureau of Labor Statistics.

The 10-year Long Island report highlights how prices increased fairly steadily in the years before the COVID-19 pandemic and then rose even faster from 2020 to 2022.

But that trend dissipated by the end of last year, with prices for deals reached in December trending below the previous year’s level.

Overall, the median price on Long Island, excluding the East End, increased by 7.1% in 2022 compared with the previous year. Through 2021, the median price had moved up 14.3% from the year before.

“The way I look at it was 2022 was the exit from the rocket ship,” said Jonathan Miller, CEO of Miller Samuel.

Long Island's price growth lagged the U.S. as a whole. Nationwide, the median price among existing-home sales increased by 96.2% from 2013 to 2022, according to the National Association of Realtors, which excludes new construction sales from its data. Granted, U.S. median prices were rising from a lower starting point. The median rose from nearly $196,000 to $384,000 during the period.

The dominant theme of Long Island's real estate market in recent years has been the persistently low number of houses for sale, said Margaret Burkett, a real estate agent at Douglas Elliman in Locust Valley. "That's what's giving support to prices," she said.

As Long Island homeowners have seen the values of their homes rise, they have an advantage, if they look to upgrade or downsize, over first-time buyers who aren't able to use the proceeds from a sale toward a down payment, Burkett said

 "When you don't have the equity, and you're not in the market yet, it's much more challenging," she said.

Prices rose faster out east. The median increased to $1.5 million in the Hamptons last year, or 87.5% higher than the comparable figure in 2013. On the North Fork, the median price more than doubled during the period to $910,000 from $450,000 in 2013. Last year, both areas saw the number of sales fall to the lowest point in the 10-year period and had a paltry number of listings available for interested buyers.

 Miller said the East End reaped even greater pricing benefits than the broader region from the since-ended era of low interest rates and the increase in remote work after the pandemic. “They’re niche luxury markets,” he said.

The report places last year's drop-off in sales into greater context. While the number of home sales fell 15.5% in 2022 compared with the previous year, last year’s pace was only slightly below the number of deals reached annually from 2017 to 2019. Those 2022 sales were recorded even as mortgage rates doubled to the highest level in two decades and the number of listings was nearly half that of 2019.  

“Although sales are down year over year, they’re really on par with pre-pandemic,” Miller said.

The data from 2022 reflects a year that was split between the first half and the second half, with the Federal Reserve's campaign of raising interest rates to tame inflation, and the corresponding rise in mortgage rates, battering home sales.

“This sets the groundwork for 2023, which is a market that’s going to be characterized by modest to little price growth, plateauing sales activity and inventory still relatively tight,” Miller said.

Falling mortgage rates could help bring buyers back into the market. The average rate for a 30-year fixed mortgage was 6.09% for the week ending Thursday, according to Freddie Mac, which is the lowest it has been since mid-September. But homebuyers are still paying far more to finance their purchases than last year at this time, when the average was 3.55%.

Meg Smith, an associate broker at Daniel Gale Sotheby's International Realty in Bay Shore, said that while mortgage rates have reduced the amount buyers can spend, she has seen plenty of activity to start 2023.

She said 30 sets of buyers attended an open house she held last weekend for a four-bedroom colonial in Brightwaters listed at $800,000. The house previously sold for $330,000 in October 2019, according to property records. It is one of only seven houses on the market in the Suffolk County village as of Thursday. 

"Certain towns where there is such incredibly low inventory, you're still getting tremendous amounts of traffic," 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.