Suffolk home prices hit new high in April while LI sales fall

The median home price in Suffolk County set a record in April, at $ 540,000, as prices climbed higher across the Island even as mortgage rates rose above 5% last month for the first time in a decade.

But a shortage of homes on the market led to fewer sales, according to data released Tuesday by OneKey MLS.

Suffolk’s median sale price was 12.6% higher than it was in April 2021. In Nassau, the median sale price was $ 666,500, or 5.8% higher than the same figure a year earlier. The median sale price recorded in Nassau was $ 670,000 last July and August.

“The market is still very strong and not slowing down in the light of interest rates going up,” said Jim Speer, CEO of OneKey MLS.

The Island’s lack of inventory for buyers, which drove prices higher, has also yielded fewer transactions. There were 942 closed sales in Nassau, which was down 25.6% from the previous April. In Suffolk, closings fell 14.5% to 1,207.

Those figures represent the fewest closed sales since July 2020 – the last month before the real estate market kicked into high gear after the first phase of the pandemic. Closed sales reflect market conditions in the previous months because of the time it takes to finalize a deal. Inventory hit an all-time low this past January and held near that point through the winter.

“The number of sold properties does have to do with the low inventory,” Speer said. “There’s only so many to buy.”

The number of homes on the market across Long Island was 5,659 by the end of April, which was 13.8% below the same figure last year. Inventory did increase in April compared to March, rising 14.7% without adjustin for seasonality.

At the end of last month, the average rate for a 30-year fixed mortgage was 5.1%. It had been just 3.22% during the first week of the year, according to mortgage giant Freddie Mac. The average 30-year fixed rate reached 5.3% for the week ending May 12.

Data on pending sales, for transactions that have gone into contract but not yet closed, suggest the median sale price could go higher in the next few months. The median pending sale in Nassau in April was a record $ 695,000, which was 6.9% higher than in the same month a year ago. In Suffolk, the median pending sale went for a record $ 560,500, or 7.9% more than in April 2021. Pending sales are not guaranteed to make it to closing and can remain in the pending category across multiple months.

Some of the increase could be attributed to buyers who have rushed to lock in their interest rate this spring to avoid a higher monthly payment if rates rise further, Speer said. But an insufficient supply of houses to satisfy demand from buyers has been the main factor behind the rise in prices in the past year, he said.

Speer expects prices to moderate later this year as buyers reach the limit of what they can afford, given higher interest rates.

“I would expect [prices] to truly level off, ”Speer said. “You would think with interest rates where they are, even though the inventory is low, we may be reaching a point where buyers aren’t going to continue to pay enough where they would keep climbing.”

The combination of higher mortgage rates and low inventory has been particularly challenging for first-time homebuyers, said Wendy Liotti, a real estate broker with Compass in Carle Place.

“A lot of buyers have just dropped out of the market,” Liotti said. “The first-time homebuyers who do not have big down payments, a lot of them have already made offers, they’ve bid above asking price, they’ve lost five, 10 houses – they’re just disillusioned and taking a break from home-buying at this point. ”

Even with some buyers exiting, there are still enough interested buyers to give sellers the advantage, said Angela Prince, a real estate broker and owner of Prince & Associates Realty Group in Bay Shore.

“Before you were 1 in 50, and now you’re 1 in 5 or 1 in 10 – there’s still someone else,” Prince said. “Once there’s someone else, you could possibly be in a bidding situation, so the sellers aren’t feeling it just yet where they feel they need to do anything.”

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