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Long Island's Inventory Is Shrinking, Which Raises Prices

Jun 23

Buyers are paying more because there are fewer properties on the market, and those who need a mortgage often lose out to those who can pay cash. The real estate boom that started during the coronavirus epidemic of the previous year has continued this year. Real estate is sought after in Great Neck, Manhasset, Old Westbury, and other areas.

According to the National Association of Realtors, the housing shortage that existed before to the pandemic has been made worse by the labor shortages and supply chain issues brought on by the worldwide health catastrophe (NAR). Not enough houses are being built to accommodate the country's expanding population or to replace aging or damaged residences.

According to statistics from One Key Multiple Listing Service, the median contract price—the amount paid by a buyer—rose to $600,000 in May from $482,500 the previous month, while the typical property price on Long Island went to $580,000 from $491,000 the previous month.

Why is Nassau County, Long Island, and the surrounding region so in demand for homes? Gil Shemtov, one of the best real estate agents in Long Beach, has been in the industry for 10 years and is affiliated with Douglas Elliman there.

Because interest rates are low, liquidity is abundant. If you are eligible, getting a mortgage will be simple. The advantages of owning a home are becoming more and more apparent. I have customers that don't want to return to an apartment as a consequence of the coronavirus lockdown. They don't want to give up their outside space for some reason."

"Nobody has ever seen something like this," Shemtov stated in reference to the epidemic. I made advantage of a virtual tour to sell a house. The buyers didn't have a chance to visit the home in person until the day of closing. They purchased a home in the midst of a lockdown." With an asking price of around $800,000, purchasers nonetheless paid less than they would have anticipated, according to Shemtov.

The present market, in Alex Sajovits' perspective, is driven by price points. To put it another way, the buyer of a home that was recently offered for $699,000 spent $765,00 on it as opposed to buying a home that was less costly. This is because buying a less expensive house would have resulted in greater remodeling expenditures. Sajovits said that, apart from the 80/20 buyer, all-cash proposals often outbid those requiring an 80/20 down payment.

As Sajovits noted, Long Island's geographical seclusion attracted residents from the five boroughs. He called it a "low-interest attitude." Mortgage interest rates are low because "money is cheap." According to real estate agent Sajovits, who has been in the industry for 21 years, Massapequa is Long Island's "hottest market." In quest of greater space, city dwellers are likewise migrating to Long Island.

Prospective buyers are paying more attention to high-end residences. People are prepared to spend more for a property, especially when moving up to the luxury market, according to co-principal Ron Lanzillotta of Pesce & Lanzillotta Team in Dix Hills. Pesce & Lanzillotta is affiliated with Berkshire Hathaway HomeServices.

Mike Pesce, a different team co-principal, claims "The epidemic changed how people thought about homes, with many families now seeing them as more than just a place to live comfortably. A higher feeling of certainty and need has resulted from the epidemic of last year and the virtual lockdown that it caused in the high-end luxury market.

According to Shemtov, houses priced between $3.5 million and $4.5 million are generating more showings and offers. Long Island is seeing a surge of New York City homebuyers, but the Five Towns and the remainder of Long Island are also wealthy, according to Lanzillotta.

Pesce asserts that "people aspire to reside in such regions" as a result of the excellent public schools in the Five Towns. These five towns are ideally located close to the seaside, golf courses, and other leisure areas. They have strong local communities." It is ideally situated close to JFK and New York City, and many of its communities have boat access.