Long Island home prices set record in June; Nassau median at $720,000

For a second straight month, Long Island home prices set records even as higher mortgage rates made housing more expensive for buyers.

The median sale price in Nassau County was $720,000 in June, or 11.8% more than the median in June 2021. It was the first time the median topped $700,000. The median sale price in May went for $689,444, according to new data released by OneKey MLS. The numbers are not adjusted for inflation.

In Suffolk, the median price among closed sales in June rose by 10.8% to a record $560,000 compared with the median in the same month a year ago. In May, the median sale sold for $555,000.

Though prices rose, fewer transactions closed last month than in June 2021 as the Island continues to struggle with a shortage of available houses for sale. The number of closed deals dropped by 14.5% in Nassau to 1,261 and by 9.3% in Suffolk to 1,547, year-over-year. Closings represent a lagging indicator of the market because buyers that closed in June typically went into contract a month or two earlier.  

The new data did show signs that the median price of closed sales could level off in the next few months. The median price of pending sales — deals likely to close in the next month or two — was lower than the median for closings, at $690,000, in Nassau and about the same, at $560,500 in Suffolk.  

The $720,000 mark in Nassau might be short lived, said Jim Speer, CEO of OneKey MLS, but he doesn’t expect a big drop in prices.

“I would not be surprised to see that’s just a one-month blip,” Speer said. “When I’m looking at the pending prices, that would lead me to believe that the [closed sales] median is not going to stay up there.”

Prices have continued to rise and the number of pending sales has held roughly steady from May to June, despite the average U.S. mortgage rate climbing to levels not seen in more than a decade. The U.S. average rate for a 30-year fixed mortgage in June was 5.52%, according to mortgage giant Freddie Mac. Six months earlier, in December, the monthly average was 3.1%.  

“The thought all along is we might see a dip in either the number of pending sales or prices due to the increase in interest rates,” Speer said. “But we’re not seeing that.”

The lack of listings has kept home sales competitive even though some buyers might be priced out of the market. If the pace of pending sales in June were to continue, it would take 2.6 months to sell off the listings in Nassau County, and 2.3 months in Suffolk. A five-month supply of homes is considered a balanced market, where buyers and sellers tend to have more equal footing in negotiations. The last time that occurred was in May 2020 in the first phase of the pandemic.

Supply “has been low for quite a while now. At some point we start looking into, ‘Is this the new normal?’ " Speer said. “It’s going to take a while to take care of all the demand out there, so I would anticipate months of supply and inventory not changing drastically.”

Higher mortgage rates and the broad decline in stock prices have led to a smaller pool of buyers shopping for houses, said Amy Girimonti, a real estate broker at Prime Properties Long Island in Huntington.

“It’s definitely a little bit of a shift in the market,” she said. “There’s been some buyer choosiness and a little more resistance to just jumping right away at a listing as it comes on the market. There’s definitely a smaller pool [of buyers] out there, and I’m seeing homes not going as quickly under contract.”

Cory Knopf, an associate broker with the Hal Knopf Team at Compass in Oceanside, said she too has noticed less urgency from buyers, which has led to houses staying on the market for a longer period. Still, it hasn’t affected prices across the market even if the premium some sellers were getting as a result of bidding wars has started to disappear. 

“Market prices aren’t coming down,” she said. “You see price reductions but those are only because people are pricing houses higher than they have ever sold for.”

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.