Annual Report

Keep Calm And Carry On

Traditionally, the real estate market starts to heat up in the spring season, bringing enough new homes for sale to satisfy the demand of the many buyers and sellers looking to make a change. This principle has been turned upside down since the beginning of the Covid-19 pandemic, and the spring market of 2023 is proving to be even more challenging than in years past. Additionally, the historical rise of mortgage interest rates and economic uncertainty over the past year has led to many questions about the stability and affordability of housing across the country. Suffice it to say the only thing consistent about the real estate market over the last three years is how untraditional it’s been.

Here on Long Island, one of the biggest hurdles buyers are faced with in searching for a home today is the lack of housing inventory for sale. In Nassau County, new homes listed for sale are down -8% from the same period of time last year, while in Suffolk County, the new listing count dropped -14% year over year. What is important to understand is that these numbers are down from already historic low inventory levels. As a result, long lines at open houses and bidding wars on the best properties are happening again. The lack of homes for sale and the continued buyer demand has kept prices relatively strong. In March 2023, the closed median sale price for Nassau County was $675,000, down slightly from March 2022 when the closed median sale price was $680,000, while in Suffolk County, the closed year-over-year median sale price was down -2.5% ($529,000 in 2022 vs. $515,000 in 2023)

Despite the increase in buyer demand and traffic, the limited inventory and mortgage rate spikes are stifling the number of homes sold. Nassau County saw home sales plummet -37% from 2022, while closed sales in Suffolk fell -29% compared to last year.

The recent mortgage rate volatility is causing people to be more cautious about their financial decisions. To put it into perspective, if a borrower pays a one percentage point difference on a $500,000 30-year fixed mortgage, say from 6%-7%, the monthly payment increases by approximately $330. On the flip side, for many people who decide to wait to purchase a home because of the instability in rates, their only alternative is renting. With more would-be homebuyers being forced to rent, rental affordability is quickly deteriorating, especially in NYC, where monthly rental prices are up in some areas by over 40% since the start of the pandemic.

In this inflationary economic environment, purchasing a home at a higher rate makes more sense, as it provides stability and security regarding your monthly payment, especially when the tradeoff is the ever-rising rent costs. On the bright side, there is increasing optimism among experts as the housing market peaks throughout the spring and summer, especially as mortgage rates continue the current trend to dip and inflation shows signs of decelerating.

Whether you’re buying or selling, being successful in today’s real estate market has become increasingly complex, so it’s more important than ever to work with a professional who you can trust to guide you through the process, and there’s no one better suited for the task than your Signature Premier Properties agent!

*Data in this Market Report is sourced from Onekey MLS for Nassau County and Suffolk County and is a comparison of residential homes sold between (Jan 1, 2022-March 31, 2022) and (Jan 1, 2023 - March 31, 2023). All information here is intended for informational purposes only and is subject to errors, omissions, changes in price without notice.