Long Island home prices sizzle to record highs in June

Home prices in Nassau and Suffolk counties set fresh records in June as buyers competed with one another for a limited number of homes on the market.

The median price among single-family home sales in Nassau County hit $800,000 for the first time in June, rising 11.5% compared with the same figure a year ago.

Meanwhile in Suffolk County, the median sale last month was a record $670,000, or 14.5% more than the median in June 2023.

Higher prices have been driven by too many buyers chasing after too few homes, local real estate experts said.

"Inventory is still from my perspective what’s driving these prices to continue to track upwards,” said Richard Haggerty, CEO of OneKey MLS.

One bright spot in Tuesday’s report for homebuyers is that the number of for sale properties at the end of June was slightly higher than at the same point a year ago. Single-family home listings across Long Island rose about 1% to 4,889.

But the improvement in homes for sale was concentrated in Suffolk, where inventory by the end of June had increased about 9% year over year. In Nassau, inventory fell by almost 10% compared with a year ago.

Still, there are fewer than half as many properties for sale now as there were in the summer of 2019 before the pandemic prompted a surge in demand for suburban homes.

At the national level, the number of houses on the market as of this week is up nearly 39% year over year, which has led to prices leveling off, according to San Francisco-based Altos Research. 

"We’re doing better than last year, but from a historical perspective, inventory is still quite low," said Odeta Kushi, deputy chief economist at First American Financial Corp., a provider of title insurance and settlement services in Washington, D.C. "We face a chronic shortage in the housing market and that won’t change overnight." 

Locally, there haven't been enough new listings this summer to satisfy buyers, said Sari Eidelkind, a real estate agent at Lucky to Live Here Realty in Cold Spring Harbor.

For example, she said Tuesday there were 49 houses for sale in the Cold Spring Harbor school district. At this time of year, she would expect there to be three times as many.

"Due to the lack of inventory, sellers are now able to really have the advantage, whereas typically in the summertime we would have a buyer’s market because there’s more homes on the market [and] more for the buyers to choose from,” Eidelkind said. "Now, it’s slim pickings.”

As a result, the average home in both Nassau and Suffolk is selling above its asking price, according to OneKey MLS.

"There are different strategies to help sellers get the highest and best price,” Eidelkind said. "When we’re seeing houses going in bidding wars, it just means that it was priced at a compelling number that allowed objections to fall away and more buyers to see that opportunity.”

Making matters worse for buyers, mortgage rates have increased slightly since the start of the year. The average 30-year fixed rate was 6.89% during the week ending July 11, according to mortgage giant Freddie Mac.

That has added hundreds of dollars to buyers’ monthly payments compared with three years ago when the average was 2.9%.

The combination of low inventory and elevated mortgage rates has hurt the number of real estate transactions on the Island. There were 15% fewer closings of single-family homes last month than there had been in June 2023.

There’s hope for buyers that cooling inflation will encourage the Federal Reserve to cut its benchmark interest rate in September which could lead to lower mortgage rates.

Haggerty said falling rates could initially create more house hunters on Long Island, but over time, it would encourage more owners to sell their homes, providing more options.

"If we see a gradual decline [in rates] that goes well into 2025, at a certain point, new listings will absorb that activity, and then you’ll start to see price moderation,” 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.