Long Island home prices continued to break records in the second quarter, but lower sales indicate that rising mortgage rates have begun to weigh on the market.
Median selling prices in the second quarter were a record $ 605,000, 9% higher than the same period in 2021, according to new data released Thursday by real estate agent Douglas Elliman and appraisal firm Miller Samuel. it was high. This number does not include sales at the Hamptons and North Fork.
Closed sales in the second quarter were 7,127, down 7.4% from the three months of 2021. Meanwhile, the number of homes for sale increased by 2.4% to 6,919 by the end of the year. Just a while ago.
In Hamptons, the median selling price rose 13.9% to a record $ 1.6 million, and in North Fork, the median reached a record $ 905,000, 14.6% higher than a year ago. Transactions were down 34.7% in the Hamptons and 10.3% in the North Fork.
Throughout the island, buyer options improved significantly in the second quarter. Listed supply, excluding the East End, increased by 74.2%, up from just 3,972 units at the end of March. Miller Samuel CEO Jonathan Miller states that this is the largest increase at that time in 10 years. Over the last decade, the average growth rate from the end of the first quarter to the second quarter has been around 14%, so this change cannot be explained by the usual seasonal trends.
“The market is pivoting,” Miller said. “The slowdown, as indicated by the increase in inventories, is significant. It’s important. It’s more than a seasonal rise, and sales are starting to decline.”
Mortgage rates played a big role. According to mortgage giant Freddie Mac, the average 30-year fixed mortgage for the week to July 21 was 5.54%. The average at the end of 2021 was 3.11%. Higher prices and rates have made US homes the most affordable in decades.
Due to the drastic fluctuations in the mortgage market Anxiety about the buyerSaid Nicole Chimento, a real estate agent at Realty Connect USA in Hauppauge.
“It’s a constant horror.” How high will they be? Can you afford to pay this month before signing the contract? ”
Of course, it’s all relative, and the recent increase in housing in the market hasn’t solved the shortage of housing for sale on the island. Inventory at the end of June (list of 6,919) is about 12,900, which is about half of the average for that period over the last decade.
Due to the shortage, a record percentage of sales exceeded the seller’s asking price. Of all sales on Long Island except the East End, 59.2% were sold at a higher price than the list price. this is, Bid war between buyers.. In the second quarter of 2021, 45.8% of homes sold above the asking price.
Barbara Schultis, senior executive manager for sales at Douglas Elliman at Merrick, has a good opportunity to list homes if the seller is on the fence, due to the combination of the general bidding war and the growing number of homes on the market. Said it would be.
“I don’t know where the market will be six months, a year or two years from now, but now you’re a brilliant penny in a pot of change,” Schultis said.
Lindig, a real estate agent at Coldwell Banker American Homes in Ronconcoma, said he was recently listed on four lists, noting that there were more inquiries from sellers than they were a few months ago.
“The difference is that more and more people are calling me to sell their homes,” Dieg said. “Maybe they’re trying to grab the price, fearing the market will fall.”
The number of lists is increasing in the East End as well. From the end of the first quarter to the second quarter in North Fork, the list grew 73% and in the Hamptons it grew 33.5%. Todd Bergard, senior executive regional manager for the Hamptons at Douglas Elliman, said more homes would typically be on the market in the east towards the end of summer.
As more homes are on the market, Miller expects prices to level off or rise slowly rather than fall. He said the pandemic bidding war, historically linked to low interest rates, was never built to last.
“It’s not a sustainable condition,” Miller said. “In many ways, the surge in mortgage rates and the slowdown they are causing is probably better for the housing market in the long run.”