Long Island home prices keep climbing with listings in short supply

Long Island hasn’t seen the same growth in the number of homes for sale as much of the rest of the country — and local buyers are feeling the consequences.

The median price of a single-family home in Nassau County was $730,000 last month, or 8.6% higher than in March 2023. The median Suffolk sale closed at $615,000 or 13.9% higher than a year ago, according to new data from OneKey MLS.

That growth in prices suggests many sellers have multiple potential buyers to choose from. Even homebuyers who have enough money for ample down payments can find themselves outbid for properties, said Andrew Russell, owner and founder of RCG Mortgage in Hauppauge.

“We have another season here on Long Island where it’s hard to get an accepted offer,” Russell said.

The median price for single-family homes fell in Nassau from $750,000 in February. That was a downward revision from $752,000 after OneKey MLS recorded additional sales that closed that month.

The Suffolk median rose from $600,000 in February. Changes are typically measured on a year-over-year basis to account for seasonality.

There were 20% fewer homes on the market across Long Island at the end of March than at the same point a year ago when inventory was already near a historic low.

In other parts of the U.S., buyers are beginning to have more options. Nationwide, U.S. inventory improved 26% in the last week of March compared with 2023, according to Altos Research.

Locally, fewer homes on the market has hurt sales. March was a sluggish month for closings, with the number of deals in Suffolk dropping 21.6% last month to 622 from the same month a year ago.

Nassau sales fell 8.6% last month to 554 compared with March 2023. Because it can take weeks or months to finalize a sale, closings reflect market activity over the slower winter months.

Jamie Gorman, an associate broker at Charles Rutenberg Realty in Plainview, said she’s seen more homes start to hit the market over the past few weeks. A few months ago, it was a struggle to even find enough homes to show buyers.

“It seems like a more normal spring,” Gorman said.

But buyers still must be prepared for some disappointment. She said it’s not uncommon to see competing offers in which other buyers waive the ability to get their deposits back if they can’t get approved for a mortgage or if they want to renegotiate after an inspection. 

“I really have to prep the buyers now to not expect to get the house and then they can be pleasantly surprised if they do,” she said. “Unfortunately, there are people who are willing to go beyond what the market value is, and when I represent my buyers, I don’t want anyone to go beyond their means.” 

Jeffrey Jimenez, a real estate agent at eXp Realty, estimated that there are well below half as many houses on the market in the Tri-Hamlet area of Shirley, Mastic and Mastic Beach where he often sells homes compared with before the pandemic.

Struggling with costs

Homebuyers earning about $120,000, who would not have had much trouble purchasing in the area three years ago are now struggling to qualify for a mortgage at today’s interest rates and home insurance costs, Jimenez said.

“Until we can build up some sort of inventory in homes on the market, we’re still going to see people who will bid houses up and pay more than what they normally would if there were more options available,” he said. 

Local homeowners have had little incentive to sell, given the cost to buy another property.

The average 30-year fixed mortgage rate was 6.88% as of the week ending April 11. A year ago at this time, the average was 6.27%. Three years ago, the rate was 3.13%, according to Freddie Mac.

Redfin reported earlier this year that nearly 9 in 10 U.S. homeowners had a mortgage rate below 6% during the third quarter of 2023.

Gorman said it remains a seller’s market and she believes longtime homeowners, even those who would need to buy another Long Island home, should test the waters.

“I think the majority of people don’t realize how much they can get for their home,” she said. “They’re calculating a lower price, and they don’t think they can afford to buy on the other end.”

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.