Small houses on Long Island give sellers chance to cash in, buyers chance at homeownership

A 446-square-foot home in Selden with zero bedrooms. A $3 million Amagansett abode, totaling 670 square feet. A collection of Rocky Point bungalows, all under 800 square feet.

Multiple small homes like these — most between 400 and 800 square feet with one or two bedrooms, and one bathroom — have hit the market this spring on Long Island. Local experts chalk it up to the Island's high-demand, low-inventory market, which has bungalow and cottage owners realizing they could make a pretty penny for their dainty digs.

"With [sellers] getting a really good price for their house that they never expected, they're able to buy up in the area, or buy something that's more affordable out of the area," said Fern Karhu, owner of Realty Connect USA, which is headquartered in Woodbury.

These houses command lower list prices than others in the neighborhood. For a first-time buyer who finds themselves otherwise priced out amid a wild housing market, it can mean a foot in the door.

Lynda Leone is a real estate agent with Realty Connect USA in Woodbury. She recently listed an 820-square-foot home in Baldwin. After numerous showings and "multiple offers over asking" price, there is currently an offer pending, she said.

"Because these young people can't afford higher-priced homes, these smaller homes are going like hotcakes," Leone said.

Sellers cashing in

From the beginning of March through late May, there were 94 homes that came on the market in Suffolk County that were listed at 800 square feet or less, according to OneKey MLS data. In Nassau during that time, 22 homes of that size were listed. In the same time frame last year, 81 homes that were listed as 800 square feet or less hit Suffolk's market, with 30 listed in Nassau.

Leone's client in Baldwin purchased their house in 2012: "My seller paid $185,000 and is getting over $600,000," she said. "That's a great profit on your house. He would never have gotten that back in the day, even pre-COVID."

For sellers, small sizes can carry some big weight: According to Zillow data, the word "cottage" appearing in a listing is tied to a 3.2% sales premium nationwide. These findings were based on Zillow's analysis of more than 2 million homes that were on the market in 2025. The homes were studied based on 600 common, key phrases used in listing descriptions and further analyzed to find how these words might factor into the sale price, according to Zillow.

Whether they're beach getaways or starter homes, sellers who have held onto these houses with smaller footprints have a chance to earn more than they expected.

"I think the people that live in them have an opportunity to max out on the values," Leone said. "And I believe that's why they're selling. Because they never would have been able to maximize the value of their home in a normal market."

Judy Hendrickson, a real estate agent with Douglas Elliman Real Estate, recently listed a 544-square-foot home in East Rockaway for $479,000. The bungalow features a bedroom and a bathroom, with no driveway or garage. It has been on the market for over a month. There is a covered area for storage underneath the house outside, and a backyard shed.

"The great thing about this property is that it's on a double lot," Hendrickson said. "You normally don't have such a big side yard."

Hendrickson has shown the home to several interested buyers so far, and the listing generated "a lot of interest" right away, she said. This is the smallest home she has ever listed. The same goes for Leone and her Baldwin listing, and she has been working in real estate since 1995.

"I believe that the sellers of these cottages and small homes are cashing out, because they have the opportunity," Leone said.

According to data on closed sales from OneKey MLS between January and the end of May,

113 out of more than 6,200

listings referenced

"cottage" or "bungalow"

in their architectural styles.

Across both counties, they closed for a median of 

$590,000

For buyers, an opportunity for growth

Springtime is traditionally prime time for sellers, Hendrickson said. As the market tightens and inventory dwindles, many homeowners who have been waiting to list their smaller homes are jumping in the game.

If there were less competition and more inventory, young couples would prioritize a home with plenty of room for possibilities; that could roomily house their futures.

"Young couples really don't go for two-bedroom homes, because they want to grow into a house," Leone said. "You don't want to move out in three years, after your family grows."

Across the country, millennials and older Gen-Zers who became homebuyers in the last two years largely sought out homes with larger square footages. According to the 2026 Home Buyers and Sellers Generational Trends Report compiled by the National Association of Realtors, 72% of buyers between the ages of 18 and 26 purchased a home with three or more bedrooms, and 83% of buyers between 27 and 35 bought homes of that size, as well.

But it's the opposite case on Long Island. According to the latest data from OneKeyMLS, median home sale prices reached $890,000 in Nassau and $718,250 in Suffolk last month. Competition is stiff, especially in Holbrook, Ronkonkoma, Selden, North Babylon and Farmingville, which are currently considered the five most competitive markets on Long Island, according to a Newsday analysis of home sales data.

So houses with more modest footprints at lower price points are among the most sensible options for first-time homebuyers with lower budgets. It's hard for them to expand their search beyond this price point, Leone said: "I believe they're forced into it."

Many of these buyers ultimately make the most of it by expanding these homes, either by extending the back or adding a second floor, she added.

"I think that's what young kids wind up doing today," Leone said.

Tiny homes part of bigger legacy in some areas

Several tiny homes in Rocky Point have come and gone from the market in recent weeks, and homes of this size have been the foundation of the community's development, said Suzanne Johnson, president of the Rocky Point Historical Society. There are hundreds of them, she added.

"But a lot of people have done bump-ups; dormered a roof to add another bedroom," Johnson said. "There's a couple that I hope stay as small and cute as they are."

Johnson has been a Rocky Point resident since 1982. She has expanded her home over the years to make her kitchen bigger, add more space toward the back of the house and has also raised her roof "to have a bedroom that I didn't hit my head in," she said.

Although she loves her community and has updated her home, she sees its realities when it comes to the current market.

"I can't sell my house and buy something similar in another area, because prices are so high," she said. "So for me, it's historic preservation."

Big movement on small homes

• Community: Selden
• Asking price: Originally $329,000; the price was reduced to $295,000 last month.
• Square footage: 446 square feet
• Status update: On the market
• Details: The home has zero bedrooms and one bathroom, with a basement and backyard shed for storage. The taxes are $3,747.

• Community: Farmingville
• Asking price: Originally $379,900; the price was reduced to $349,900 shortly after it was listed in March.
• Square footage: 456 square feet
• Status update: There is an offer pending, according to its listing.
• Details: The house sits on a dead-end street, with a newly updated roof. The taxes are $3,248.

• Community: Selden
• Asking price: $379,900
• Square footage: 504 square feet
• Status update: There is an offer pending, according to its listing.
• Details: Newly updated electric, appliances, roof and septic tank. There is a backyard shed and deck. The taxes are $3,346.

• Community: Amagansett
• Asking price: Originally listed for $3.2 million; the price was reduced to $3 million last month.
• Square footage: 670 square feet
• Status update: On the market
• Details: Built in 2014, its sleek, boxy design was brought to life by Bates Masi Architects. The taxes are $2,384.

• Community: Huntington
• Asking price: $400,000
• Square footage: 490 square feet
• Status update: Sold for $433,000 last month
• Details: The home features a two-car driveway and a crawlspace. The taxes are $4,040.

• Community: Rocky Point
• Asking price: $429,000
• Square footage: 783 square feet
• Status update: There is an offer pending, according to its listing.
• Details: The home is covered in wood paneling throughout the walls and ceilings, and sits on a quarter of an acre. The taxes are $7,270.