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December 2021 Long Island Real Estate Market Update
Is the bubble about to burst? Are we just taking a deep breath or are things getting ready to be hot and heavy again in just a few more months?
Welcome back to the Real Estate Market Update. I’m Dean Miller.
If you’re thinking about buying or selling a home in the near future, understanding the current state of the market is key to your success. Pay attention to the leading indicators, we’re going to share a lot of that information with you, and let’s discuss what’s happened during the month of November compared to the same timeframe last year in 2020.
To steal a line from the red rocket, Sammy Hagar, do we have one foot on the brake and one on the gas right now? I don’t know, but driving 55 doesn’t sound like it’s the right thing for most people to be doing right now.
The market is changing a lot. Some people are panicking, others are getting super excited. We look at things right now and what we’ve been talking about with our clients is what we call deceleration. We’re not driving in the left lane, doing 95 miles an hour flying past everybody. We’re not in that middle lane, doing 60, 65 and breaking the law, but we’re definitely not in the right lane waiting for oncoming traffic, just barely doing 55. There’s a lot of movement. There’s a lot of patience. And like we’ve talked about in the past, sometimes you’ve just got to hurry up and wait to take that next step. So, let’s take a look at some of the numbers from the last month.
November 2021 Real Estate Numbers
November numbers have changed drastically from last year and there’s one reason why.
When we look at the top sales in November of this year, the top sale was 38.4 million. Now does fall under a standard real estate transaction because it is a huge piece of land, a 30 plus acre piece of property up in Manhassett, North Hills, depending on what you call it, right across the street from Christopher Morley Park, where they’re going to be building 46 luxury homes in a gated community. So, we’re excited to see where that goes in the next 12 to 36 months, which is about the timeframe it’s going to take to get all that stuff up and running.
But when we look at realistic. $5.5 million was the number two sale, number ten sale, $2.7. Those luxury homes are still moving and that’s kind of the price range we’ve been watching happen here in Nassau county. Huge change in percentages. Let’s take a look. Again, we’re talking about November 2021 compared to November 2020. Normally we compare numbers from the month before. We wanted to take a different look to start to give people an idea of what those year end numbers are going to look like. So stay tuned. January’s report is going to be very, very interesting and very telling as to what’s going to happen in the future of real estate.
That number dropped 30% in November compared to the same time last year. That is a huge drop. We’ve been talking about month supply, and we’re going to get to that in a little bit. But you hear me talk about month supply of inventory being the key to driving prices up right now, along with interest rates.
Pending listings, the number of homes that came off the market, they’re under contract, no longer available, they’ll be closing anywhere between 30 and 90 days from now on average. That number’s up 9%. So, we’re seeing a slow down in new listings coming on the market, which is typical of this time a year. You’ll hear me refer to seasonality.
But we did see a lot of pendings and what I’ve talked about historically over 20 years is people who come out and look at homes this time of year, they are not your nosy neighbors. They’re not the looky-loos. They’re the ones who are out there with a need, they’re looking to buy. So holding off on selling until the spring just because you want to get more activity, today may be the best time for you to put your house on the market if you’re considering making a move in the next couple months.
Sold listings, the number that closed. That number is down 23%. Again, seasonality has a lot to do with it. We had a frantic spring and summer. Some people are just exhaling, taking that foot off the gas a little bit and decelerating, but definitely not dipping. Average prices skewed a little bit this month because of that massive 30, 38 plus million dollar sale.
But we’re looking at an 18% increase. And if we take that big sale out, we’re probably looking at somewhere around high 15%, low 16% appreciation. Still a massive number. If you can get an 18% return on your investment annually, you’re doing pretty damn good. Median sale price in my opinion is one of the most important numbers. That’s the middle of the market. So, if 100 homes sold, 50 sold above this price, 50 sold below it, that number’s up 12%.
We’re looking at $680,000 as the median price here in Nassau county. It’s an incredible number. We’ve shown massive appreciation over the last three or four years. We expect to see these numbers continuing to increase for the reasonable future.
Time On The Market
Time on the market, how long homes are sitting from the day they’re listed to the day they go pending, that number’s down 22% this year. Again, homes are coming off the market quicker because more and more agents and more and more homeowners are more strategic in their pricing strategies, pricing homes right to get top dollar, to get that asking price and above. We’re not looking at overpricing a house, sitting and waiting, and hoping someone will come along and pay your price.
This is the number that I talk about constantly in every conversation I have with people who are considering making a move. Month supply of inventory is down 38% from this time last year. That number is down to two month supply. What does that mean? If nothing new comes on the market in the next 60 days, give or take, there will be zero inventory left if we continue to sell at the pace that we’ve been selling at. This is extremely low, almost historically low. And the fact is, if you’re thinking about making a move and timing isn’t an issue, but you think waiting for the spring is going to get you more money, it may be a mistake. You may want to consider putting your house on the market now, talk to your professional, understand the pros and cons of listing your home today as opposed to waiting until March, April, or May of next year.
And the final piece of the puzzle that has an impact on what’s happening with the market. Interest rates. Now we are still ridiculed low. I can’t say historically low anymore because we are over 3%. Interest rates have crept up 7% from November of last year. We’re looking at just short to 3.25% as an average interest rate nationwide according to bankrate.com. Here in New York and along Long Island, our rates tend to be a little bit higher. So, speak to a qualified lender, get some insight as to what rates are based on the program that you’re looking to get involved in.
2022 Real Estate Predictions
It’s almost that time of year where we start to make predictions for the next calendar year, and I’ve been crunching numbers and doing some research and I plan on sharing those numbers with you in our December edition and definitely in our January edition. But rough numbers right now talk about the real estate industry continuing to appreciate, home values continuing to go up, transaction volumes starting to go up, and quite possibly this could be the year where we start to see the inventory rates go up, but the month supply not chasing it. Meaning the homes that go on the market will continue to come off.
I do anticipate that 2022 will be, at least the first half of the year, will be a more active selling season. More transactions will happen. More people will relocate. And the reason why I say that is we’re looking at more and more people here on Long Island who are looking at lifestyle change. Whether it be the political climate, personal issues, whatever it is, more and more of the people we’re having conversations with are looking to relocate and completely leave Long Island.
So those who are older, are no longer willing to pay the taxes that we’re paying at an exorbitant rate here in Nassau County, still one of the highest tax counties and one of the most expensive places to live in the country. We’re seeing more and more people talking about instead of buying that luxury home, actually taking out their sale price, making a lateral move, and getting a bigger house out of town. But we are seeing a tremendous amount of influx coming in in that first time buyer market, which will continue to push everybody here.
The demand for entry level homes on Long Island is going to be overwhelming in the next calendar year. As always, we appreciate your time. If you have any questions, we’re here to be a resource for you. Give me your input, share your positives and negatives, let me know if you agree or disagree. As always, thanks for your time. Have a fantastic day.