The Long Island housing market has been a hot topic in recent years, with prices and trends constantly changing. In this article, we'll dive into the current state of the market and provide a forecast for what's to come in 2023. The Long Island housing market has been in the news for a while now. With the pandemic driving a surge in remote work, many people are leaving cities and seeking bigger homes in suburban areas.
However, before making a decision to buy or invest in Long Island, it's important to understand the natural hazards and environmental risks that could impact the value of your property. In this blog post, we will discuss the risks associated with floods, storms, fires, droughts, and heat in Long Island.
The Long Island housing market has been showing a steady increase in median sale prices over the past year. In fact, according to Redfin, the median sale price of a home in Long Island reached $600K last month, reflecting a 0.2% increase since last year. Additionally, the median sale price per square foot in Long Island is now $393, up 0.4% since last year. These figures indicate a trend of moderate growth in the Long Island real estate market, which may continue in the coming months.
One of the reasons for this trend may be the increased demand for housing in Long Island. As more people look to move out of densely populated urban areas, Long Island has become an attractive option due to its proximity to New York City and its suburban lifestyle. The COVID-19 pandemic has also influenced this trend, as many people have shifted to remote work, making it easier to live further away from the city.
Another factor contributing to the rising prices is the limited supply of homes for sale. With low inventory levels, buyers are competing for the available properties, which has resulted in bidding wars and higher sale prices. This trend may continue as the demand for housing in Long Island remains strong, especially for larger homes with more space and amenities.
Before investing in a property in Long Island, it's important to consider the natural hazards and environmental risks that could impact the value of your property. Climate change is causing an increase in the likelihood of extreme weather events like heatwaves, storms, and wildfires. Water stress is also a growing concern.
By understanding the risks associated with floods, storms, fires, droughts, and heat, you can make informed decisions and mitigate potential risks. ClimateCheck™ is a useful tool that can help you analyze a property's risk from climate change using the latest modeling and data from climate scientists, universities, and federal agencies.
Will Prices Drop in Long Island Housing Market?
February proved to be a better month for Long Island home sales than January, but year-over-year numbers still show a decline. Despite this, brokers have noticed a recent uptick in buyer activity, offering a glimmer of hope for the housing market. Let's dive deeper into the numbers. According to preliminary data from OneKey MLS, 1,903 homes were contracted for sale in Nassau and Suffolk counties in February, an increase of 28.9% from the previous month.
However, this number is still 15% less than the 2,240 pending home sales recorded in February 2022. Long Island pending home sales have now seen year-over-year declines for the last 20 months, making it clear that the market has been struggling.
Recent Spike in Activity
Despite the decline in year-over-year numbers, brokers have noticed a recent uptick in activity, particularly around mid-January. Open houses have seen more foot traffic, and buyer activity has picked up in the past six weeks. In fact, some brokers have even seen lines forming at their open houses, which is a positive sign. Associate broker at HomeSmart Premier Living Realty in Williston Park, Ken Olson, reports that the phone is ringing more frequently as well.
Prices Continue to Drop
As the market struggles to gain momentum, home prices have continued to drop. The median price of closed home sales in Nassau in February was $640,000, down 3% from January and 1.5% from February 2022. The median price of closed home sales in Suffolk was $532,000, down slightly from January but up 1.2% from February 2022.
The still-low number of available homes for sale is keeping prices from falling even faster, but brokers have noticed more price drops. Olson suggests that if a new listing isn't sold within three weeks, it's a clear indication that the price should be dropped by $10,000 or $20,000.
Inventory Levels and Mortgage Rates
The low number of available homes for sale is also due to higher mortgage rates, which are causing homeowners to hold onto their current homes rather than become sellers. According to bankrate.com, the average mortgage rate for a 30-year fixed loan is 6.96%, which means that homeowners will likely have a higher monthly payment on their next home. As a result, fewer homeowners are willing to sell, which is contributing to the low inventory levels.
While February's home sales were better than January, the Long Island housing market is still struggling. Year-over-year numbers continue to decline, and home prices are dropping. However, brokers have noticed an uptick in activity in recent weeks, which is a positive sign. Inventory levels remain low, but higher mortgage rates are contributing to this issue. It remains to be seen if the Long Island housing market will rebound anytime soon, but the recent uptick in activity is a hopeful sign for the future.
Sources:
- https://www.redfin.com/neighborhood/219261/NY/New-York/Long-Island/housing-market
- https://www.nysar.com/news/market-data/reports/
- https://libn.com/2023/03/06/long-island-home-sales-heat-up-as-prices-cool/
