Oct

31

Long Island Real Estate Market: Home Pricing Update

Filed Under Sellers |

The median price of homes under contract in the Long Island real estate market (Nassau and Suffolk) fell again last month. Additionally, the number of available homes on the market fell. The median price of homes under contract dropped $15,000 in August from $350,000 to $335,000 in September.

In September of 2007, median price of a home sold was $380,000, a 12% decline. Nassau saw less severe declines of $417,300 in August to $415,000 in September of this year, with a decline from $445,000 this time last year (a 6.5% deline).

Throughout the island, there are less properties on the market than there was a year ago. There were 14,413 homes on the market in Suffolk County in September of this year, compared to 14,761 this time last year. What this shows is a decline in inventory, albeit a marginal decline. This means less homes are coming to market for sale.

The months of supply throughout the Long Island real estate market has declined as well from 19 months last year to 14.8 months as of September this year. The months of supply helps us determine how long it would take to sell every house that’s currently for sale. While this is over a 20% decline in months supply, 14.8% is still very high.


To summarize and make sense of all of this data, it’s important to note that these are all indicators that the market will continue to slide downward as we head into 2009 and probably well into 2010. Many experts were predicting Spring, 2009 as the overall bottom, but these numbers don’t indicate a bottom in 2009. It is a game of “catch up” and the numbers homeowners need to improve are getting better, but that’s just to get us to break even or to the bottom. From there, the numbers need to improve in the opposite direction for prices to actually go up, which does not seem to be anywhere in the near future.

If you don’t want to wait around indefinitely trying to recoupe the loss of equity during the past 32 months or so, the first step would be to determine your home’s value - now. See where you stand. I like to look at this situation this way: If it takes 40 months of decline to lose 25%, it will probably take at least that much to gain it back. Historically, over the past 100 years, real estate realizes a respectable 5% appreciative value annually. Forty months is equal to just over 3 years. Once we reach bottom, the best case scenario is the market will again begin realizing 5% appreciation which is actually on 15% compounded value.

All the jibberish aside, if you can follow it - it’s going to be a long time before the Long Island real estate market is back to normal. Keep in mind that this article did not even take into account a “global recession”, local foreclosures and the increasing number of short sales, as well as the credit crunch and decreased qualified buyer pool. And of course, our ever-increasing property tax burden, which in Nassua County especially, doesn’t seem to have any hope for, at the very least, a holding pattern, as county officials are looking to increase property taxes there once again.

The purpose of this article is to help those homeowners who are on the fence or mistakenly thinking that they can wait until Spring, 2009 to miraculously sell their home “for more”, to consider the hard reality that now is the best time to sell their home. For those homeowners who are “in it for the long haul”, obviously that’s a better position to be in, but that “long haul” must be carefully weighed against reality.

For questions about the Long Island real estate market, please feel free to call me at anytime at 631.587.1700, ext. 51.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson


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  1. Tom McGiveron | Long Island Real Estate Market | Coldwell Banker Realtors on November 11, 2008 9:57 am

    […] one has a crystal ball, but I can safely say that and not think twice about it. Sure there are some bright spots which have been discussed in previous articles, but ultimately, if you have plans to move on in […]