Long Island home prices drop lower in September in seasonal dip 

Long Island home prices may have reached their peak this year, as data for September showed median home prices were either lower or the same as the previous month in Nassau and Suffolk counties, respectively.

However, home prices continue to show significant gains compared with the previous year.

In Nassau County, the median price of a single-family home was $815,000 in September, which was down from a record $835,000 in August. The median was 8.7% higher than in September 2023, according to new data from OneKey MLS. The real estate industry uses those year-over-year comparisons to eliminate seasonal differences in prices.

In Suffolk County, the median single-family home price last month matched a record at $680,000, or 10.6% higher than in September 2023. The price was unchanged compared with August, according to OneKey's sales report. 

Last year, prices also peaked in August in Nassau and Suffolk.

"The prices, which are still showing significant increases year over year, show that the buyers are still out there," said Richard Haggerty, CEO of OneKey MLS. 

One of the main drivers of rising home prices has been a shortage of available homes on the market. That remains a problem on Long Island even as other areas of the U.S. have started to see more options for buyers.

There were about 1.7% fewer listings across Nassau and Suffolk counties combined at the end of September compared with the same time a year ago. The number of houses on the market was flat compared to the previous year in Suffolk and down 8.3% from the year before in Nassau.

There are fewer than half as many available homes for sale as there were five years ago in September 2019 before the pandemic started.

Nassau did see more newly posted listings last month than it did in September 2023 — a 6.9% increase — but ultimately many properties found buyers and the number of those that were available fell by the end of the month.

“The numbers are going in the right direction,” Haggerty said of the burst of new listings in Nassau. “Are they going to solve some of the underlying problems that we still have with inventory? No.”

Across Long Island, the lack of inventory has hurt the number of transactions. There were 1,667 closed sales in Nassau and Suffolk in September, according to OneKey MLS, which was about 3% fewer than in the same month a year ago.

Higher mortgage rates, according to mortgage giant Freddie Mac, have contributed to that trend, as the average 30-year fixed rate averaged 6.74% in the three months preceding September, when buyers who closed last month would have been shopping for a rate.

The average mortgage rate has fallen this year to 6.32% as of the week ending Oct. 10, according to Freddie Mac. But it is still far higher than it was three years ago, when it stood at 2.99%.

Ed Svec, an associate broker at Compass in Rockville Centre, said one would expect prices to recede a bit as rates doubled but the low availability of homes has driven prices higher.

“Our housing market is unique compared to other parts of the country. Other areas where they have more new construction, it creates more of a balanced market at a time like this,” Svec said. “On Long Island, we’re in pretty much a very strong seller’s market right now, where sellers are still dictating all the terms for the most part.”

In recent weeks there has been a slowdown in new listings, said Holly Brainard, an associate broker at Daniel Gale Sotheby’s International Realty in Stony Brook.

While the shortage of options continues to give sellers the edge in negotiations, Brainard said homeowners should be careful before putting a house for sale at an aspirational price that will not appeal to savvy buyers.

“There’s plenty of buyers out there and they’re frustrated because they can’t find what they want,” she said.

“I had a buyer who said, ‘Even with interest rates where they are, I’m willing to pay the money, but I’m not just going to buy anything,’ which I think is a very different mentality than it was during those really frantic COVID days where people were just scrambling to grab anything.”

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.