Long Island Homes Prices at Highest Point Ever

The Long Island market is having its moment.

Demand for homes in the mostly modest, middle-class communities stretching from Nassau County to Riverhead is sizzling, after having been overshadowed during the pandemic by the Hamptons and North Fork.

“In every single market, the average and median sale price was the highest in history,” said Miller Samuel CEO Jonathan Miller, who tallied the data in a third-quarter report for Douglas Elliman. “Talk about consistency.”

Miller didn’t examine individual towns and hamlets, but when looking at the overall markets in Nassau and Suffolk counties (west of Riverhead) by property type, the result was the same: record high prices.

The median sale price on Long Island last quarter was $640,000 and the average was $767,000. Bidding wars occurred in more than half of all sales, the fourth highest rate in history.

The sky-high prices defied mortgage rate increases because supply of for-sale homes was so scarce. Inventory fell 27 percent year-over-year and sales fell 17 percent, signs of a constrained market. Inventory has plunged by 66 percent since the third quarter of 2019, the last comparable period before the pandemic.

The luxury market outperformed the rest of Long Island’s homes. The threshold for a luxury home, or homes priced in the top 10 percent of the market, rose to $1.235 million, an all-time high.

Bidding wars — sales above the asking price — accounted for nearly a third of all sales in the luxury market, where the median sale price was $1.6 million (a 10 percent annual increase) and the average was just under $2 million (a 13 percent jump).

For buyers, no relief is in sight.

“I think we have another year of this unless we have an adverse economic event like a recession,” said Miller.

Miller joked that a recession appears less likely this week than last, because the Philadelphia Phillies were eliminated from World Series contention, which in the past has foreshadowed a downturn.

In the Hamptons, sales increased quarter-over-quarter for the second time since Miller Samuel started tallying the data 18 years ago.

“It tells me that maybe we’re seeing a little bit of improvement in a market where sales are far below their normal levels,” said Miller.

Inventory rose 4 percent annually and, in turn, prices fell. The average sale price was $2.3 million, a 19 percent drop, and the median was $1.4 million, down 11 percent.

“The idea here is that prices are lower than last year’s all time highs, but they’re still significantly above pre-pandemic levels,” said Miller. “Sales are tepid but we’ve seen a little short-term strength in the abnormal seasonal increase, and listing inventory is limited.”

On the North Fork, inventory fell yet sales ticked up, which caught Miller by surprise; less inventory usually means fewer sales. The average sale price was $1.3 million and the median sale price reached $1 million for the first time. The median sale price is nearly 60 percent above what it was prior to the pandemic.

“The market has reset quite a bit,” said Miller.