The Long Island housing market slogged through another disappointing month in December, capping off a year of transition for the residential real estate industry.
As had been the case for most of 2022, home sales slowed down, and home prices continued to retreat again last month.
There were 1,583 Long Island homes contracted for sale in December, down 14 percent from the 1,846 pending sales of the previous month and a drop of 34.4 percent from the 2,414 homes that were contracted for sale in Dec. 2021, according to preliminary numbers from OneKey MLS.
The number of Long Island home sales in December was the lowest number of December home sales in the last nine years.
Home sales on Long Island have seen year-over-year declines since the overheated pandemic market began to cool in the second half of 2021. There were 28,214 homes contracted for sale in Nassau and Suffolk counties in 2022, a nearly 21.5 percent drop from the 36,065 pending sales in 2021.
The meteoric rise in Long Island home prices that was propelled by the pandemic-fueled buying frenzy has come back down to earth. The median price of closed home sales in Nassau last month was $652,500, down from $668,000 the previous month and the lowest median price since last March.
In Suffolk, the median price of closed home sales in December held steady at $545,000, the same as the previous month, and the lowest median price since April’s median of $540,000.
While prices have been sliding back, they remain higher than a year ago, if only barely. Nassau’s median price of closed home sales last month was just 1.2 percent higher than the $645,000 median recorded in Dec. 2021. Suffolk’s median price of closed home sales last month was 3.8 percent higher than the $525,000 median recorded in Dec. 2021.
While current mortgage rates are averaging about 6.5 percent for a 30-year fixed loan and nearly double what they were a year ago, they haven’t caused big drops in home prices because of the still-low inventory of homes for sale here.
There were 5,154 homes listed for sale with OneKey MLS—2,374 in Nassau and 2,780 in Suffolk—as of Thursday, which is down 14.4 percent from the 6,025 homes that were listed for sale at the end of November. But the current inventory is also 17.3 percent higher than the 4,394 homes that were listed for sale at the end of Dec. 2021.
“In 2023, we expect a more normally paced market without the buying frenzy prompted by the pandemic and rock-bottom mortgage rates of the previous two years,” Deirdre O’Connell, CEO of Daniel Gale Sotheby’s International Realty, said when asked about her outlook for the coming year. “With many homeowners locked into very low-rate mortgages, many are not in a rush to move, which is adding to the limited number of available homes on the market.”