When real estate agent Dawn Jordan listed a hi-ranch in Holtsville in February, she planned to hold a 90-minute open house at the property.
But the turnout for the public viewing was so great, the event turned into a four-hour marathon.
Listed for $449,000, the four-bedroom, two-bath hi-ranch on .28 acres at 181 Spiral Road generated 62 showings at the open house, with some prospective buyers waiting up to two hours to see the property.
Needless to say, Jordan, a sales agent with First Hampton International Realty, got an accepted offer for the home within a few days. While the sale is currently pending, she can’t disclose the contracted price, but Jordan acknowledged it was “substantially above” the asking price.
“This is by far the craziest market I’ve seen since I became a real estate agent,” Jordan says.
The experience of the Holtsville sale is being repeated at residential properties throughout Long Island, as strong demand and weak supply push prices skyward and make buying a house here an exercise in futility.
For homebuyers, choices are limited. There were just 6,008 Long Island homes listed for sale with OneKey MLS last week, 3,093 in Nassau and 2,915 in Suffolk. That’s down nearly 100 homes from the previous month and down 37.7 percent from the 9,643 homes listed for sale at the end of March 2020. The number of homes currently listed for sale is about half of the 11,873 homes that were listed for sale in March 2019.
At the same time, demand for homes is stronger than it’s been for quite some time. There were 3,322 homes contracted for sale in Nassau and Suffolk counties last month, according to preliminary numbers from OneKey MLS, 29.8 percent more than the 2,560 pending sales in February and nearly 34 percent more than were contracted for sale a year ago.
The supply/demand imbalance has driven home prices to record highs. The median price of closed home sales in Nassau County in February reached $600,000, 14.3 percent higher than the $525,000 median price of Feb. 2020, according to OneKey MLS. In Suffolk County, the median price of home sales closed in February was $475,000, 18 percent higher than the $402,444 median price recorded in Feb. 2020.
Brokers say competition for homes priced below $800,000 is fierce. First-time homebuyers, homeowners looking to downsize and investors are all in the market for the same properties. The result is homes selling for more than their asking price.
In the first three months of the year, 34 percent of the single-family homes in Nassau sold for $800,000 or less went for over their list prices. In Suffolk, a whopping 49 percent of homes that sold for $800,000 or less went for more than their asking price, according to OneKey MLS.
“Last summer, offers were $5,000 to $15,000 over asking. Last fall they were $15,000 to $30,000 over,” said Ken Olson, an associate broker with HomeSmart Premier Living Realty in Williston Park. “In the last few months, it can be $50,000 or more over asking to get the house.”
Olson recently listed a three-bedroom, one-bath ranch in Massapequa for $419,000 and had an accepted offer for $11,000 over asking in just six days.
“Less than a minute after I posted the listing on MLS, my phone started ringing,” he said.
Mariah Mills, a real estate agent with Daniel Gale Sotheby’s International Realty, received about 15 offers for a three-bedroom, three-bath home on a shy acre in Cutchogue that was listed for $749,000. A week after it was listed, Mills got an accepted offer for $157,000 over the asking price.
“We had about 30 people look at it in five days,” Mills said.
And these days, that’s the norm rather than the exception when it comes to the Long Island housing market.
Jessica Stanco, a real estate salesperson with Coach Realtors in Northport, was inundated with prospective buyers after listing a three-bedroom, one-and-a-half bath ranch on Dale Lane in Smithtown for $475,000.
“I had 90 showings in three days,” Stanco said. “It was a revolving door.”
Stanco received 53 offers and secured an accepted offer less than a week after the house was listed for sale.
Though the sale is pending and Stanco couldn’t disclose the contracted price, she said it was “well over” the asking price.
Brokers say that much of the strong demand for Long Island homes has come from people looking to escape the city during the pandemic and millennials, the largest segment of the population, who are now of home-buying age. It’s also a product of low mortgage rates, which despite recent upticks, are still at just over 3 percent.
“It’s the perfect storm for sellers,” says Jordan. “It’s a great time to sell. Inventory is at an all-time low and coupled with historically low mortgage rates it has pushed prices to record highs.”
Janet Pushee, an associate broker with Coldwell Banker Realty in Huntington, attracted 53 prospective buyers at an open house for a three-bedroom, one-bath ranch in Hicksville she listed for $400,000. The house on East End Avenue received 37 offers before selling for $106,500 over asking.
“It’s crazy, but very unbalanced in favor of the sellers,” Pushee said. “It’s tough. I usually carry about 20 to 25 listings at any given time. Now I have seven.”
Current market conditions have made it much more difficult for those who make their living in the housing industry, especially when it comes to getting listings. Right now, there are more than three times the number of real estate brokers and sales agents in Nassau and Suffolk than there are listings to sell.
“There’s a lot of competition to get listings,” Olson says. “I’m working twice as hard to do fewer deals. And if you do get a listing, it’s gone in a week.”
Opinions vary on why more homeowners aren’t selling, though most agree it’s a combination of pandemic uncertainty and a limited number of options for their next move.
“Because of COVID, a lot of sellers didn’t want 60 people walking through their home,” Olson said.
And if they do sell, where will they live?
“People have nowhere to go,” Mills said. “Homeowners know it’s a sellers’ market and I’m getting a lot of requests for pricing their properties. But they’re holding tight because they don’t know where to go. It’s not just on Long Island. Inventory is low across the country.”
Indeed. There were 1.03 million homes for sale across the U.S. at the end of February, unchanged from the January level, which was the lowest number of listings going back to at least 1982, according to the National Association of Realtors.
Last month, 39 percent of homes contracted for sale in the U.S. went for more than their list price, up from 23.9 percent a year earlier, according to the Redfin brokerage. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the country, rose 11.2 percent from Jan. 2020 to Jan. 2021, the biggest yearly price jump since Feb. 2006.
And the price hikes are likely to continue for a while. Home prices in the U.S. are expected to climb another 12 percent this year and rise at least 6 percent next year, according to a report in the Wall Street Journal.
Here on Long Island, brokers say the bidding wars for homes will continue until the inventory rises significantly, which may take a while.
“With more and more people being vaccinated, I feel there will be surges in the inventory,” says Stanco. “But the buyers haven’t stopped. It’s simple economics. It’s supply and demand.”