The competitive real estate market in Long Island, New York, is staying strong even as surging mortgage rates prompt a slowdown in many other parts of the country, according to data released Thursday.
The median sale price of homes sold on Long Island hit a record $620,000 during the third quarter, which includes July, August and September, according to data compiled by real estate firm Douglas Elliman and appraiser Miller Samuel.
The figure marked a 2.5% increase compared to the previous quarter and a 6% rise compared to the same period one year ago.
Homes spent an average of just 41 days on the market during the third quarter — the shortest recorded in more than two decades of available tracking data, the firms said. The data excludes sales that occurred in Long Island’s Hamptons and North Fork, which are tracked separately.
The market stayed red-hot even as mortgage rates continued their climb toward 7% as the Federal Reserve hiked interest rates. The average 30-year fixed-rate mortgage has hit its highest rate in two decades, raising costs for buyers and forcing many sellers in other markets to slash their asking prices.
While higher mortgage rates are crimping demand, a lack of available inventory has helped to prevent major price declines so far, according to Jonathan Miller, the CEO and president of Miller Samuel. Listing inventory fell nearly 6% compared to last year, while the number of closed sales fell 16% year-over-year.
The extent of the overall housing sector slowdown will depend on whether the Fed continues to hike interest rates or “pivots” to looser fiscal policy.
“Because the pandemic era housing boom was not fueled by Wall Street financial engineering as was the case in the prior boom, the combination of low mortgage rates remaining too low for too long and the resulting obliteration of housing supply, prices have a substantially firmer base underneath them,” Miller told The Post.
“However, at this point, the length of time this slowdown lasts is really up to the Fed,” Miller added.
While home prices have held on Long Island so far, it’s unclear how long the trend will continue given the affordability crunch facing buyers. The average 30-year fixed rate mortgage hit 7.08% on Thursday — its highest since April 2002, according to Freddie Mac.
Some experts have warned that US home prices could ultimately fall by as much as 20% by next year.