With far fewer homes available for purchase, buyers pay more, and more often than not, buyers who need mortgages lose out to those who offer cash. The real estate boom that began during the coronavirus pandemic last year has continued to sizzle this year.
Nationally, the median home price hit an all-time high of $ 341,600 in April, up 19% from 2020, according to the National Association of Real Estate Agents, who also reported that there was a housing shortage before the pandemic, and that supply chain problems and labor shortages created by the global health crisis have exacerbated the problem. Not enough homes are being built for the country’s growing population, or to replace aging and destroyed homes.
The median price of homes on Long Island jumped to $ 580,000 in May from $ 491,000 last May, while the median contract price – the amount a buyer actually pays for a home – rose to $ 600,000 in May compared to $ 482,500 last year, according to the One-key multiple listing service.
“Why is the demand for homes so high on Long Island, especially in Nassau County? Said Gil Shemtov, a 10-year real estate industry veteran and agent for Douglas Elliman in Long Beach.
“The rates are low and there is a lot of liquidity. It’s easy to get a mortgage if you qualify. People see the value of home ownership. I have clients who were with their families [during the coronavirus lockdown] and do not seek to return to an apartment. They get used to having the outdoor space and don’t want to give it up.
“No one saw this,” Shemtov added, referring to the pandemic. “I sold a house through a virtual tour. Buyers only saw the house during the visitation the day before the closing. They bought the house while in lockdown. In this case, buyers paid less than what the home could have been listed for, Shemtov said – the highest $ 700,000 instead of the lowest $ 800,000.
Real estate agent Alex Sajovits sees the prices driving the current market. Sajovits, who works for Douglas Elliman in Rockville Center, noted that the buyer of a home recently listed at $ 699,000 ended up paying $ 765,000 rather than buying a cheaper home because the home renovation the cheapest would have cost more. Sajovits also said that all-cash offers frequently crowd out what he called the 80/20 buyer: 80% mortgage, 20% down payment.
Sajovits noted the differences between Long Island and New York City, which motivated residents of the five boroughs to move to a more open area. “It was a low interest mentality,” he said. “Money is cheap” which means mortgage interest rates are low. Sajovits, who has worked in the real estate industry for 21 years, said Massapequa is Long Island’s “hottest market”. He also sees people from the city moving to Long Island for more living space.
Even high-end homes are attracting more and more offers. “People are willing to spend more on a home, especially to move into the luxury market,” Ron Lanzillotta, co-director of the Dix Hills-based Pesce & Lanzillotta team, wrote in an email. Pesce & Lanzillotta is a subsidiary of Berkshire Hathaway HomeServices.
“The pandemic has helped change the definition of a home – it now means more than space or comfort for many families,” wrote Mike Pesce, another team co-director, in the same e- mail. “There is also more confidence and need in the high-end luxury market because of last year’s event” – the pandemic and the virtual lockdown that followed.
Shemtov also said the $ 3-4 million homes attracted “more showings and multiple offers than in previous years.”
Homebuyers come from New York to Long Island, Lanzillotta said, but there is also money in Long Island and the five cities, he added.
“People want to live in neighborhoods in the five cities because they have great schools,” Pesce said. “The five cities also have well-established neighborhoods and are located near beaches as well as golf and country clubs. Its communities allow access to boating and, of course, are closer to JFK and New York. “