Sales activity in Long Island was through the roof in the first quarter of 2021, spurred in part by the lowest number of homes for sale in years.
The number of available homes plummeted by 33.6 percent year-over-year, according to the latest report by Douglas Elliman. That’s a 14.2 percent decline from the previous quarter, and the lowest the island has seen in the nearly 18 years the appraisal firm Miller Samuel, which prepares the report, has tracked sales data.
Homes for sale were already declining pre-Covid, but the number of listings decreased quickly as homes sold faster than new ones became available, said Jonathan Miller. Sellers were reluctant to have strangers enter their homes due to pandemic safety concerns.
Meanwhile, the number of closed sales surged by 35.3 percent year-over-year, the largest rate in 11 years. The median sale price rose year-over-year for the fourth quarter in a row to $525,000, the highest on record.
On the luxury side of things, the median sale price jumped 24.5 percent to $1.2 million, the second highest on record after the previous quarter’s median price of nearly $1.3 million.
Much like the overall market, the high-end market is either setting or flirting with record median price levels as inventory falls, Miller said. The luxury market saw available homes decrease by 38.7 percent year-over-year, its second lowest on record.
These kinds of changes are shifting the pace of the market, said Miller.
According to Miller Samuel’s report, it would take 2.1 months to sell all available listings at the current pace of sales. That’s an increase from the previous quarter’s all-time low of 1.9 months — and the rise indicates that the market is slowing down.
And nearly 40 percent of closings sold above the last asking price, a sign that bidding wars are still happening, Miller said.
“Clearly these conditions at this intensity are not sustainable, but next quarter is the biggest quarter of the year,” said Miller, suggesting that the market could see more records during the spring months.
While he does not anticipate an influx in inventory across the market as a whole anytime soon, there may be some minor improvements. As Covid-19 vaccines continue to have rapid distribution, he said he expects to see some uptick in supply as sellers become more willing to open their doors to strangers looking for homes, though that might not be enough to meet demand.