Long Island Real Estate: February 2012 Update

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The Long Island real estate market’s greatest challenge during the last 5 years has been a consistent flood of available homes for sale that far exceeded buyer demand. Today, the supply and demand factor is still playing a part in keeping downward pressure on pricing, but the market is definitely moving the right direction overall.

If you’ve been a frequent reader of my blog, you’ll know that I have been providing updates on the market in the form of Inventory Vs. Sales. The slide below demonstrates that while sales dropped in January 2011, so did the inventory. You’ll note from my article on the Long Island real estate market in September, 2011, that the market had over 33,000 homes for sale (condo and residential). This decline in inventory represents a 14.2% drop in homes for sale since then.

Even with a “seasonal adjustment” (inventory usually drops in winter), that decline most likely represents a market direction that will see fewer homes coming to market overall. This is good news. Of course, the 31.8% drop in sales is also significant, but the seasonal adjustment would probably account for most of this decline (fewer homes sell in winter and September sales represent mainly June/July contracts – the height of the buying season).

Bottom Line
For sellers, it’s important to note that we are nearing the gradual incline of home appreciation. How near are we is subject to ebbs and flows of the overall economy, but from the best in the business, conventional wisdom has us gaining ground anywhere from 12 to 24 months from now. Selling now is mainly advantageous if you are looking to buy another home (at a discounted price) so selling low is okay as long as you’re buying low. And with mortgage rates so ridiculously low now, the investment return is compounded.

For buyers, what else is there to say. The market is primed for purchasers. Enough said. Word of caution though, you should pay attention to some of the previous articles I’ve posted here on my site:
What is a G-fee?
Will the 30 Year Mortgage Disappear?