Residential real estate on Long Island continues to strengthen, with signs that only the lack of available properties will cause the market to find a top. The overall market showed positive gains over the first part of 2017, and each individual segment of the Long Island residential market posted positive numbers. Real estate investors would be hard pressed to find a more robust real estate market.
Overall Look at Long Island Home Sales
By any measure the residential real estate sales on Long Island is booming. This is not a surprise to even casual observers since it has been a hot market for several years already. The average sales price of a single family residence rose by 3.55% Year-to-Date over the second quarter. The number of days on the market fell a remarkable 15.5% to only 87 days.
As would be expected, sellers were able to command their price, giving up only 3.4% in the second quarter of their listing price in order to close the sale. However, when the top 10% of sales – defined as the luxury market- are excluded from this calculation the listing discount fell to only 1.1%. This is remarkable given that the Long Island residential real estate market has posted annual increases in the median price of homes every quarter for over 4 years at this point.
Sector Analysis of The Luxury Real Estate Market
The robust performance is not hindered by softness in any particular market. Condos, single family homes and luxury homes all posted increases in both average and median sales prices through the second quarter of the year. All posted a drop in the second quarter in the number of days on the market, although the luxury market had an insignificant Year-To-Date increase of 4 days over the second quarter of 2016.
It is no surprise that the threshold for luxury sales increased as prices in the market increased. The top 10% of sales had a cut-off of $825,000 in the second quarter, an increase of 4.4%. The listing inventory for luxury homes fell to the lowest level for the second quarter in the past 9 years, strongly indicating that the robust demand will continue to drive price increases for this sector of the market.
Area Analysis of Residential Real Estate Sales
Just as with the different market sectors, all the geographic areas of Long Island saw increases in the key indicators of the real estate market. Both Nassau and Suffolk posted increases in average and median sales prices. Both areas had price trend indicators that foretell higher prices in the future, such as a fall in the Listing Discount and the Number of Days on the Market.
However, none of the areas can compare to the performance of the residential real estate market on the Suffolk North Shore. Both average and median prices rose by 11.7% year-To-Date over the second quarter of 2016. A decline in both listing inventory and marketing time strongly suggest that prices will continue to continue this strong upward trend. As if to emphasize this potential, the absorption rate – the number of months it would take to sell the existing market inventory fell to only 2.6 months.