Long Island’s housing market in February saw the fewest completed sales since July 2020, when the first wave of the pandemic delayed transactions as buyers continued to face a shortage of homes in the market.
Realized sales fell 15.1% in Nassau County, to 954, and 17.7% in Suffolk, to 1,181 from February 2021, according to data released Tuesday by OneKey MLS. Island-wide, sales fell 16.6%. A historically low number of homes on the market, a scarcity due in part to intense buyer demand, has dampened sales in recent months.
Home prices in both counties rose from the same month a year earlier. In Nassau, the median sale price was $650,000, up 8.5% from February 2021. In Suffolk, the median sale was $527,000, up 10.9% than a year earlier. Prices changed little from the previous month and have remained fairly stable since the fall.
The island’s inventory issue improved slightly at the end of last month. The market did not set a record low for homes on the market in February, as it had for the previous three months, with about 100 more listings at the end of last month than at the end of January. . But there were still about 25% fewer homes on the market in February compared to a year earlier.
New listings were about the same as last year at this time, but buyer demand kept homes on the market and increasing inventory on hand, said Jim Speer, CEO of OneKey MLS.
“That’s what keeps the market hot. It’s that stocks are still down,” Speer said.
What there is to know
- Long Island Home Sales fell 16.6% in February from a year earlier and hit its lowest level since July 2020.
- The median selling price in Nassau County increased by 8.5% to $650,000 over the previous year. Suffolk’s median sale was 10.9% higher, at $527,000, than the same figure a year earlier.
- The median price among pending sales which have not yet closed was $689,900 in Nassau and $550,000 in Suffolk. Prices could rise, but Jim Speer, CEO of OneKey MLS, said more data is needed to determine if this is a trend.
The number of contract signings last month for sales that have not yet closed was higher than the sales made. Pending sales fell 6.6% in Nassau, to 1,020, and 7.3% in Suffolk, to 1,278, from those February 2021 figures, a positive sign for the market with such low inventory, Speer said.
“There have been concerns about what will happen if interest rates start to rise, which of course they have,” he said. “Will inflation start to slow the market? At this point it’s not, which is a good sign. We’re not seeing much of a slowdown in selling which is currently contracting .”
Rising interest rates could limit the purchasing power of buyers this year. The average rate on a 30-year fixed mortgage was 3.85% for the week ending March 10, according to mortgage giant Freddie Mac. A year ago, this rate was 3.05%. The Federal Reserve will meet this week and is expected to approve a rate hike to keep inflation under control. Mortgage rates tend to rise during periods of inflation.
Contracts signed last month point to higher closing prices in the spring. The median price for pending sales that have yet to close was $689,900 in Nassau County and $550,000 in Suffolk.
“I find it hard to give a lot of credit to what happens in a month because it could be a bump for some reason and come back down, but it has increased,” Speer said.
The houses that are on the market are generating a lot of interest. Nicole Chimento, realtor with Realty Connect USA in Hauppauge, said she held an open house on March 6 for a three-bedroom home in West Babylon that drew about 45 to 50 buyers who lined up in the driveway and on the street. The show resulted in about 20 bids, and most were above the asking price of $465,000.
“You now have buyers who waive the appraisal clause to ensure their offer is the strongest and they will get the house,” Chimento said. Buyers who waive an appraisal contingency agree to pay more cash if their lender appraises the home at a lower value.
The number of homes on the market is unlikely to rebound substantially over the next few months, so buyers need to find ways to put in as much money as possible to make their offers stand out, said broker Joe Moshe. real estate and owner of Charles Rutenberg Realty in Plainview, which has offices in the metro area.
He said buyers should be prepared to use all their financial resources to get their offer accepted and enlist the help of family, if possible, to make the most competitive offer. Some buyers are withholding money for repairs, which Moshe says is a mistake.
“The market is too tough to lose a house for the money you have in the bank. You better get those repairs done in a year or two,” Moshe said. “Don’t lose a house for something you can afford with your disposable income.”