Suffolk County median home price hits $600,000 for first time
The median home price in Suffolk County reached a record $600,000 in October, showing the degree to which Long Island’s housing market was unfazed by a surge in mortgage rates this fall.
But data on more recent sales shows prices moving lower, which is typical as winter approaches.
The Suffolk median price increased by 9.1% compared with October 2022, while the median price in Nassau County increased 7.4% year over year to $725,000, according to data released Tuesday by OneKey MLS. The median in Nassau was down slightly from its peak of $735,000 in September.
The data shows prices for more recent sales have moved lower. The median price for pending sales that had not yet closed in October was $706,000 in Nassau and $585,000 in Suffolk — both lower than the median in closed deals.
WHAT TO KNOW
- The median home sale price in Suffolk County reached a record $600,000 in last month, increasing 9.1% compared with October 2022.
- The median price in Nassau increased 7.4% to $725,000.
- A combination of high mortgage rates and a scarcity of listings led to the fewest closed sales on Long Island in October since 2012.
Seth Pitlake, a real estate agent with Douglas Elliman in Merrick, said he believes prices in his area may be have hit their peak.
"I don't believe they're going to stay this way for much longer,” Pitlake said. “I don't think the sellers are going to see these prices ever again. This could be the last of our over-the-top market.”
The biggest factor contributing to rising home prices is the lack of homes for sale across Long Island. There were 5,072 homes on the market at the end of October, which was 23% fewer than at this time a year ago. It’s the fewest listings for the end of October since at least 1988, according to OneKey MLS data. The recent low was recorded in January 2022, at around 4,400 homes.
Until more homes hit the market, prices will remain steady, said Angela Prince, a real estate broker with Weichert Realtors who leads a team of agents in Bay Shore
“It’s all about the inventory,” she said. “ … We still have multiple buyers for every house that’s priced well.”
Still, Prince said it’s important sellers pay close attention to what other houses in their area have sold for recently because listings that are priced too high are starting to sit for longer.
“If they’re pushing the envelope too much, or the price is not what it should be, in the old market those houses might have fared OK, but the way the market is now, they’re not,” she said.
Home prices kept rising even as the average U.S. mortgage rate climbed steadily over the past few months — from 7.07% in August to 7.62% in October, according to Freddie Mac. The average was 7.5% for the week ending Nov. 9.
Pitlake said he's still seeing strong buyer demand, and the appeal of communities in Nassau County has grown as workers commute to offices in Manhattan more frequently.
“They're realizing that if they want to purchase a home, they purchase when they find the right home, and then worry about the rates later” and potentially refinance in a few years, Pitlake said.
Higher mortgage rates have added hundreds of dollars to Long Island homebuyers’ monthly payments and have knocked some potential purchasers out of the market altogether.
In October 2022, the average was 6.9%. Two years ago, rates averaged 3.07%.
One effect of higher rates is fewer transactions.
There were 2,041 deals that closed last month, down nearly 13% compared with the same month a year ago. It is the fewest sales during October since 2012.
As very low mortgage rates move further into the past, borrowers are starting to accept that they’ll be paying more in interest on their home loans if they want to make a purchase, said Steve Probst, a loan officer at Fairway Independent Mortgage Corp. in Freeport.
“People are getting more used to the higher rates, so it’s not as shocking when they start to talk about it, which really helps,” Probst said.
Homebuyers hoping mortgage rates will move at least somewhat lower to make their housing payments more affordable received good news Tuesday from the U.S. Bureau of Labor Statistics, which reported inflation continued to slow to 3.2% for the 12 months through October. Consumer prices increased by 3.5% in the 25-county metro area that includes Long Island.
Mortgage rates should fall over the next year as inflation moves closer to the Federal Reserve’s 2% inflation rate target, Lawrence Yun, chief economist at the National Association of Realtors, said in a statement Tuesday.
“Mortgage rates look to head towards 7% in a few months and into the 6% range by the spring of 2024,” he predicted.
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.
