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Long Island home prices climbed higher in February, matching a record high in Suffolk County, as few homeowners opted to put their homes on the market.
Local agents said homeowners have been turned off by elevated mortgage rates that would leave many potential sellers with higher monthly housing payments if they opted to move.
The median single-family home in Nassau County sold for $795,000 last month, or 5.7% higher than during February 2024, according to a new report from OneKey MLS. That is down from a peak of $835,000 in August.
In Suffolk, the median sale price last month matched a record high at $680,000, which was 13.3% higher than in the same month a year ago. Real estate experts typically compare data on a year-over-year basis because of seasonality in home sales.
At the end of February, the number of houses for sale on Long Island dropped 6.5% compared to the same figure a year earlier. Without more listings this spring, hopeful homebuyers could be left disappointed, said Richard Haggerty, CEO of OneKey MLS.
“We’re still suffering from an interest rate environment that is not encouraging sellers to list their properties,” he said.
The average 30-year fixed mortgage rate was 6.65% during the week ending Thursday, according to mortgage giant Freddie Mac. The average has remained above 6% since September 2022. Three years ago, the average was just 3.85%.
Tim Galligan, a real estate agent who leads a team at Keller Williams Points North in Woodbury, said he doesn’t expect to see a significant change in the market unless mortgage rates drop. Instead, he said many homebuyers must pick one of three options — pause their search, settle for a house that fits their budget but might not have everything they want or overpay.
That’s because too few Long Islanders are putting their homes up for sale, Galligan said.
“Everyone refinanced and a lot of people bought when interest rates were low,” he said. “They’re not going to want to move and pay significantly more for a bigger home or even pay the same as what they’re paying 1742251449 for a downsizer.”
February marked a low point for transactions over the past year, with just 1,137 deals closing last month. That was roughly equal to the number of closings in the same month a year ago, but the number of deals was down 21% compared with January. Closed sales reflect deals that were often agreed to several months earlier, with February’s numbers reflecting transactions during the slower months of December and January.
Homebuyer demand has cooled nationally because of higher interest rates, said Daryl Fairweather, chief economist at Redfin. But Long Island has shown stronger demand for homes than the rest of the country.
Home prices on Long Island in February increased at the third-fastest rate among the 50 most populous metropolitan areas in the country behind the Milwaukee and Detroit metro areas, according to a report from real estate brokerage Redfin. Unlike OneKey, the real estate brokerage’s method for tracking prices combines Nassau and Suffolk counties and includes all residential sales, including single-family homes, condos and co-ops.
Fairweather said she would expect falling mortgage rates to heighten demand for homes, which could lead to greater competition among homebuyers on Long Island. If homeowners are staying put, the region would need more building to boost the supply of houses.
“In order to make housing more affordable, we really need to start paving the way for new construction in terms of zoning reform, permit reform and even subsidizing new construction, she said.”
Long Island is still in a strong seller’s market, said Angela Prince, a real estate broker who leads a team of agents at Weichert Realtors in Bay Shore. She said she continues to see homes receiving multiple offers that exceed sellers’ asking prices.
But Prince said sellers’ asking prices are getting closer to the maximum buyers are willing to pay.
“We’re getting to that point where the market is almost like, ‘OK, we’ve had enough,’” Prince said “But we’re not there yet.”
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain’s New York Business.
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