After home sales on Long Island slowed in July, the market rebounded in August, amid continued strong demand and weak supply.
There were 3,241 homes contracted for sale in Nassau and Suffolk counties last month, a slight bump from the 3,190 homes contracted for sale in July, according to preliminary numbers from OneKey MLS.
There were 1,438 pending home sales in Nassau last month and 1,804 pending home sales in Suffolk. And though August pending sales ticked up slightly from the previous month, they paled in comparison with a year ago.
Last month’s pending Long Island home sales were 23 percent lower than the 4,213 pending sales recorded in August 2020, when pent-up demand caused by the industry’s two-month shutdown during the height of the COVID-19 pandemic sent home sales soaring.
However, a better measure of last month’s sales activity is a comparison with the last “normal” August two years ago. The number of Long Island homes contracted for sale last month was an increase of 6.1 percent from the 3,054 homes contracted for sale in August 2019.
So far this year, the number of pending home sales on Long Island is well ahead of the last two years. There were 24,957 homes contracted for sale in Nassau and Suffolk counties in the first eight months of this year. That’s 15.3 percent more than the 21,648 homes contracted for sale in the first eight months of 2020 and an 11.5 percent increase from the 22,381 homes contracted for sale from January through August in 2019.
“Entry-level is still rocking and rolling for every housing market on Long Island,” says Bryan Karp, a top producing associate broker with Coach Realtors. “But you’re not seeing the same number of bidding wars and long lines outside open houses. And you’re not seeing offers of $100,000 above asking like we were, because new home values have now been factored into pricing.”
The median prices of closed Long Island home sales in July reached record highs. The median price of closed July home sales in Nassau climbed to $670,000, an increase of 3.9 percent from the $645,000 median in June and a whopping 21.8 percent rise from July 2020 when the median sales price was $550,000. In Suffolk, the median price of closed home sales in July was $525,000, up nearly 3 percent from the $510,000 median in June and a 19.5 percent increase from the $439,500 median in July 2020.
Meanwhile, the inventory of Long Island homes listed for sale remains low.
There were 7,370 homes—3,648 in Nassau and 3,722 in Suffolk—listed for sale with OneKey MLS at the end of last month. That is 24.5 percent fewer than the 9,759 homes that were listed for sale at the end of August 2020 and 42.8 percent fewer than the 12,874 homes listed for sale at the end of August 2019.
And while inventory is still low, the number of available homes for sale has steadily increased since the historic low recorded at the end of March. The 7,370 Long Island homes listed for sale at the end of last month is 22.6 percent more than the 6,008 homes that were listed for sale in March 2021.
“The reason why it’s still a sellers’ market is that inventory is still incredibly low in a majority of the Long Island markets,” Karp said. “We need to work off all of those buyers who’ve been waiting on the sidelines for more inventory to hit the market, because it appears that’s not likely to happen any time soon.”
The housing boom of the last couple of years has been fueled by historically low mortgage rates. Last week, the interest rate on the average 30-year fixed-rate mortgage was 2.87 percent, according to FreddieMac. Housing analysts predict that a significant increase in rates would lower demand and slow the rise in prices.
“Everyone needs to watch interest rates, which may rise to stave off inflation,” Karp says. “That will serve to soften the market.”