Long Island home sellers seemed content to sit out spring market in April

Long Island’s real estate market hasn’t blossomed with new listings this spring, and as a result home prices have remained close to last year’s levels.

The sharp rise in mortgage rates during the past year has increased a typical buyer’s monthly payments by hundreds of dollars a month, but it has had a surprisingly limited effect on local home prices.

The median sale price in Nassau County for deals that closed last month fell 1.3% to $660,000 compared with the median in April 2022, according to data released Friday by OneKey MLS. In Suffolk, the median rose by 0.9% to $545,000 in April compared with a year ago. Those prices reflect deals that were agreed to over the past few months as it can take weeks or months to close a deal.

For sales that were pending, but had not yet closed in April, the median price was $680,000 in Nassau, or 3.1% lower than the same figure a year ago. In Suffolk, the median for pending sales was $555,000, which was 1.8% below the comparable figure in April 2022.

“One factor in sellers’ favor is there has not been a significant price correction at all,” said Richard Haggerty, CEO of OneKey MLS. “Prices are trending slightly down … but it definitely isn’t a buyers’ market by any stretch of imagination. It just doesn’t seem that sellers want to take advantage of that because they’re saying, ‘I have no other [homes] to look at’” for themselves. 

The number of homes on the market across Long Island, 4,844, remained near historic lows at the end of April. There was a 2.8% bump in inventory compared to the previous month.

In most years, spring is one of the most popular times for sellers to list their homes. But April’s inventory level is 14% lower than at the same time a year ago and fewer homes were on the market than at the end of January. Before the pandemic started, there were more than 10,000.

“We continue to have a lot of people in a holding pattern,” Haggerty said. “The spring market hasn’t materialized in any substantial way.”

The result is fewer deals being struck between buyers and sellers. There were 2,216 sales in contract in April on Long Island, or 17.7% fewer than in the same month a year ago. Closed sales were down nearly 32%, reflecting the slowdown over the late winter months.

Buyers searching in specific communities have far fewer options than in years past. Larry Theodore, an associate broker at Coldwell Banker American Homes, said he has come to expect about 150 to 180 homes on the market in Farmingdale over the course of his 38-year career. On Friday, he counted 29 for sale.

“It’s unheard of,” he said. “The buyers are out there. When a house comes out as a new listing — I made a listing on Tuesday at 1 o’clock and by 5 o’clock we had 10 showings scheduled already.”

As a result, Theodore has come to expect multiple offers on houses he lists, with some getting several dozen offers, because buyers outnumber sellers.

Housing experts are closely watching to see what it will take for homeowners who purchased or refinanced a mortgage within the past few years to make a move, trading in a mortgage rate around 3% for one above 6%. There are still people experiencing life changes — marriages, divorces, children or new jobs — that might require a move, but so far the number of available homes hasn't budged, said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.

The average mortgage rate for a 30-year fixed loan in April was 6.34% compared with 4.98% in April 2022, when rates had just begun the ascent.

“We’re trying to understand in the housing market if people will keep wedded to their low-interest rate mortgages,” Lautz said of would-be sellers.

Correction: The Farmingdale home pictured is for sale for $599,990. A caption with an earlier version of this story gave an incorrect price.

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.