Inventory Is Decreasing On Long Island, Causing Prices To Rise

With fewer homes on the market, buyers are paying more, and purchasers who require a mortgage are typically losing out to those who can pay in cash. This year has seen a continuation of the real estate boom that began during the coronavirus outbreak of previous year. Buyers are searching for real estate in Great Neck, Manhasset, Old Westbury and beyond.

There was a housing scarcity before the pandemic and supply chain challenges and labor shortages produced by the global health crisis have compounded the problem, according to the National Association of Realtors (NAR). To keep up with the country's rising population or to replace old and destroyed homes, not enough homes are being created.

One Key Multiple Listing Service data shows that the median contract price – the price paid by a buyer — increased to $600,000 in May from $482,500 in May of previous year, while the median home price on Long Island grew to $580,000 from $491,000 in May of last year.

"Why is there such a strong demand for homes in Nassau County, Long Island, and the surrounding area?" One of Long Beach's top realtors, Gil Shemtov, has been in the business for ten years and works with Douglas Elliman in the city.

Liquidity is plentiful because interest rates are low. If you meet the requirements, obtaining a mortgage will be a breeze. People are realizing the benefits of owning their own house. As a result of the coronavirus lockdown, I have clients who aren't interested in moving back into an apartment. For some reason, they don't want to give up their outdoor area."

 

When Shemtov mentioned the pandemic, he said, "Nobody has ever seen anything like this." In order to sell a property, I used a virtual tour. It wasn't until the day before closing that the purchasers had a chance to see the house in person. In the middle of a lockdown, they bought a house." However, buyers paid less than they may have expected to pay, Shemtov claimed, with an asking price of around $800,000.

In Alex Sajovits' opinion, the current market is driven by price points. To put it another way, the buyer of a recently advertised $699,000 house ended up spending $765,00 for it instead of purchasing a less expensive house. This is due to renovation costs, which would have been higher if they had purchased a lower-cost property. Aside from the 80/20 buyer, Sajovits stated that all-cash offers are regularly drowning out those with an 80/20 down payment.

As Sajovits pointed out, the five boroughs' citizens were drawn to Long Island because of the city's geographic isolation. A "low-interest mentality," he explained. "Money is cheap," which means that mortgage interest rates are low. Massapequa is Long Island's "hottest market," according to real estate agent Sajovits, who has been in the business for 21 years. People from the city are also flocking to Long Island in search of more space.

High-end properties are getting increased attention from potential buyers. Co-principal Ron Lanzillotta of Pesce & Lanzillotta Team in Dix Hills noted in an email that people are willing to pay more on a home, particularly trading up to the luxury market. Berkshire Hathaway HomeServices is a partner of Pesce & Lanzillotta.

According to Mike Pesce, another co-principal on the team, "the pandemic helped redefine the idea of a house — with it now representing more than room or comfort to many families. Last year's pandemic and the accompanying virtual lockdown in the high-end luxury market have contributed to a greater sense of confidence and necessity.

More numerous showings and offers are being generated for properties between $3.5m and $4.5m, according to Shemtov. Homebuyers from New York City are flocking to Long Island, but the Five Towns and the rest of Long Island have money, too, according to Lanzillotta.

Because of the Five Towns' strong public schools, Pesce claims, "people desire to live in those locations." These five towns have longstanding communities and are conveniently positioned near the coast, golf courses and other recreational areas." Boat access is available in several of its villages, and it is conveniently located near JFK and New York City.