On Long Island, the less sellers ask for, the more buyers are willing to pay.
As prices for expensive houses fall throughout the New York suburbs, the market for mid-priced single-family homes in suburban Long Island remains surprisingly stable.
“There has been virtually no loss of value in homes prices below $500,000 since there is strong demand for lower-priced housing by recent immigrants and newly formed households,” said Pearl Kamer, chief economist with the Long Island Association, a think tank that promotes development and prepares monthly updates about the Long Island economy.
The median price of single-family homes in Nassau County, which borders New York City, actually rose in August, reaching $502,500 from $495,000 in July, according to the most recent data available from the island’s West Babylon-based Multiple Listing Service. In neighboring Suffolk County, east of Nassau County, the median price sagged slightly, from $409,000 in July to $405,000 in August.
Compared to home prices in other New York City suburban markets in the same price range, these Long Island counties represent something of an oasis of calm. While the area isn’t alone in holding onto its home values, dwellings in that price range in some other suburbs have seen steeper declines.
According to multiple listing data, in parts of New Jersey, Connecticut and New York’s Westchester County, home prices have fallen drastically, although in most areas the decline has been much softer. In Lumberton, N.J., the average home was off 16 percent to $267,900, according to Trend MLS, a King of Prussia, Pa.-based provider of real estate statistics. New home sales in the Northeast plunged 24 percent in July from a month earlier, according to the Commerce Department.
More expensive houses in Nassau and Suffolk counties haven’t fared as well.
“The biggest downward price adjustment is likely to come from higher-end homes, those priced above $750,000, because high-end sellers have more leeway to lower their prices,” said Kamer.
Those higher-priced houses took a multi-pronged hit. They are down, on average, above 10 percent from a year ago. They are also staying on the market longer. Suburban Long Island houses priced above $750,000 have been on the market on average 26 days longer than a year ago, according to data from appraisal firm Miller Samuel.
Also, these suburbs are increasingly becoming popular with families of first generation immigrants. Nearly 16 percent of residents in Nassau and Suffolk Counties are foreign-born, according to U.S. Census data, and brokers say such families are laying down long-term roots and buying entry-level homes.
Another factor is financing. Mortgage broker Mike Costanza at Realty 3000 Properties Inc. in Holtsville, Long Island, said that in light of escalating loan delinquencies, it is more difficult to get financing for jumbo mortgages — mortgages over $417,000 — and many buyers on Long Island can no longer stretch to buy more expensive homes.
Brokers indicate the credit squeeze is forcing buyers to reconsider what types of homes to buy.
This is true not only in Long Island’s suburban core areas, brokers say, but even true of buyers looking for vacation homes on the East End.
“We are seeing customers who might have invested in a higher-priced second home but are buying in this [middle] range. This is where their comfort lies,” said Kathleen Travers, a broker with Brown Harris Stevens North Fork.