In February of last year, we laid out our predictions for the Long Island spring real estate market. While no one could have predicted what would happen just a month later with everyone going into lockdown and real estate sales effectively coming to a halt until June 2020, the housing market on Long Island quickly rebounded during the second half of the year.
This year, things are shaping up to be a bit more normal. We’ve already been busy helping sellers and buyers make early moves in 2021, ahead of the usual selling season. With spring just around the corner, here are our thoughts on what’s ahead for Long Island real estate.
Buyer Competition Will Remain Fierce
The early days of the pandemic saw many people leaving New York City for Long Island. A year later and buyer demand for homes remains as strong as ever. With the vaccine rolling out, kids returning to school, and workers going back to the office, people are hopeful. This optimism, along with continued low interest rates, have propelled many prospective buyers into the Long Island market. However, with inventory continuing to stay near record lows, buyers are finding the marketplace crowded and competition fierce.
If you’re planning to buy this year, be prepared to move fast. Homes often go into escrow just days after being listed. Working with the right agent that knows the market and has the negotiation skills to get offers accepted is critical. You’ll also need a certain amount of patience and resilience to buy in this market. Many buyers make several offers before finally going under contract.
Home Prices Will Likely Not Waiver Much
Across the country, home prices are expected to climb 5.7% this year. Here on Long Island, thanks to all the buyer demand in the real estate market, low housing supply, and low mortgage rates, we anticipate home prices remain strong during the spring and summer. Multiple offer situations help drive up prices, with buyers doing everything they can to entice the seller.
If you’re planning to sell your Long Island home, this is good news for you. Yet even in a hot seller’s market, it’s important to work with a team who can help you get top dollar for your home. First impressions still matter and homes that are marketed properly will draw the attention of more prospective buyers. More attention means more offers for you. More offers usually mean more money in your pocket at the closing table.
Inventory May Increase
Though we’ve had months of persistent low inventory conditions on Long Island, with a rosy economic outlook, the optimism of a new stimulus plan, and widespread vaccine rollout ahead, more sellers may opt to list their homes in 2021. While it likely won’t be enough to offset the current demand, more inventory may make things a little easier for prospective buyers.
Interest Rates Will Likely Inch Up
While interest rates will remain low throughout 2021, rates have started to creep up in recent weeks. The 30-year fixed mortgage rate hit 3.26%, the highest it’s been since July 2020. Still, with rates under 4%, most buyers see the wisdom of buying a home now to lock in a great rate.
The Housing Market Won’t Crash
In recent weeks, the rumbles about a potential housing market crash have gotten louder. Many people point to sustained home price growth over the last few years as evidence that the market may be headed for a crash. After all, what goes up has to come down right?
Yet out here on Long Island, it’s easy to see that it’s just basic economics at work. As we have mentioned many times, low supply and high demand, coupled with the historically low interest rates will continue to fuel this aggressive real estate market.
While only time will tell, it seems unlikely that the housing market will crash in 2021.
If you’re planning to sell or buy a home on Long Island this year, we would love to earn your business. Our innovative, targeted marketing strategy has helped many of our clients sell their homes for record prices. If you’re looking to get top dollar for your home, check out some of what we do to successfully market your home here. You can also request a free estimate of your home’s current value today. If you have questions about the market or would like to see an updated activity report for your neighborhood, reach out to us.
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