Long Island home sales improve, though rates still high amid low supply | Long Island Business News

Sales of Long Island homes rebounded somewhat last month, despite a continued dearth of supply and higher mortgage rates. 

There were 2,090 homes in Nassau and Suffolk counties contracted for sale in October, up from the 1,941 homes contracted the previous month, according to preliminary numbers from OneKey MLS. 

Last month’s pending home sales were nearly the same as the 2,110 homes contracted for sale in Oct. 2022, marking the first time in more than two years that monthly pending Long Island home sales didn’t see a significant year-over-year drop. 

Home sales on Long Island continue to be hampered by a lack of available inventory. There were 5,804 Long Island homes listed for sale with OneKey MLS as of Monday, 2,275 in Nassau and 2,809 in Suffolk. That’s 12.6 percent fewer than the 6,641 homes that were listed for sale at the end of Oct. 2021 and Oct. 2022 and 34.6 percent fewer than the 8,869 homes listed for sale at the end of Oct. 2020. 

The limited supply of available homes for sale amid still strong demand has fueled a rise in prices. The median price of closed home sales in Suffolk last month reached $600,000 for the first time ever. The median price in Suffolk last month represents an increase of 9.1 percent over the $550,000 median price from a year ago. 

In Nassau, home prices in October actually retreated a bit from the previous month. The median price of closed home sales in Nassau last month was $720,000, a rise of 6.7 percent from the $675,000 median of Oct. 2022. But last month’s $720,000 Nassau median price was $13,550 lower than the $733,550 median from the previous month and the first drop in the county’s median home sales price since February. 

Despite the improved sales numbers last month, brokers maintain that higher mortgage rates are keeping Long Island’s housing market from a broader recovery. The average rate on a 30-year fixed loan in New York is 7.82 percent this week, according to bankrate.com. 

“For the first time in three years, the sentiment has changed, and things are slowing down as higher rates are starting to have an impact on the traditional homebuying borrower,” said Shahzad Qureshi, owner/broker of Syosset-based Pinnacle Real Estate Consulting.  

Qureshi, a 13-year veteran of the Long Island residential real estate industry who owns and build houses here, pointed out that if a buyer puts 20 percent down on a $750,000 house, the $600,000 loan on the balance at 7.5 percent results in monthly payments of about $5,000, not counting property taxes and other expenses. 

“Specifically, I’ve found that in the $700,000 to $1 million price range, the numbers no longer make sense for a first-time buyer to purchase a $700,000 house with a 7-plus-percent interest rate,” he said. “You can rent that same house for less, without the headaches of owning a home.”