Though last month’s Long Island home sales improved from a dismal January, year-over-year sales numbers remain weak, as home prices continue to retreat.
There were 1,901 homes contracted for sale in Nassau and Suffolk counties in February, that’s an increase of 28.9 percent from the previous month, but still 15 percent fewer than the 2,240 pending home sales recorded in Feb. 2022, according to preliminary numbers from OneKey MLS.
Long Island pending home sales have now seen year-over-year declines for the last 20 months, however brokers are encouraged by a recent spike in activity.
“Right around January 15th we started seeing a little more foot traffic at open houses and it definitely seemed like buyer activity picked up. It’s kind of been like that for the last six weeks through the end of February,” says Ken Olson, associate broker at HomeSmart Premier Living Realty in Williston Park. “I even had a small line at an open house and the phone is ringing a little more.”
Home prices have been trending lower. The median price of closed home sales in Nassau last month was $640,000, that’s down 3 percent from the $660,000 median price in January and a drop of 1.5 percent from the $650,000 median recorded in Feb. 2022. Last month’s median price of closed Nassau home sales was the lowest in the last 21 months.
The median price of closed home sales in Suffolk in February was $532,000, down slightly from the $535,000 median price of the previous month, but up 1.2 percent from the $527,000 median price recorded in Feb. 2022.
“I have noticed prices coming down a little bit and you see more price drops. I’d say if you have a new listing and it’s not sold within three weeks, I think that’s a clear indication you could probably drop the price by $10,000 or $20,000, depending on where you started,” Olson said. “Buyers are being a little more selective and I’m starting to see them asking for some repairs or a small credit.”
Meanwhile, the still-low number of available homes for sale is keeping prices from tumbling even faster. There were 4,825 Long Island homes listed for sale with OneKey MLS—2,312 in Nassau and 2,540 in Suffolk—as of Monday. That’s down 4.5 percent from the 5,083 homes that were listed for sale at the end of January, though 9.8 percent more than the 4,420 homes listed for sale at the end of Feb. 2022.
To put the current inventory level in perspective, there were 14,784 homes listed for sale in Feb. 2015, the last time there were fewer pending Long Island home sales for the month of February. Today’s inventory is more than 67.3 percent lower.
Higher mortgage rates are a big factor in keeping inventory low. With this week’s average mortgage rates at 6.96 percent for a 30-year fixed loan, according to bankrate.com, fewer homeowners will become home sellers because they will likely have a much higher monthly payment on their next home.
“I think if you purchased in the last two years, even if you feel you overpaid, it just doesn’t make sense to sell if you were locked in at 3 percent,” Olson says. “I’d be happy to be locked in at 3 percent, especially if you’re planning on staying 10 or more years, because you have buyers now looking at 6 plus percent.”
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