Long Island home prices climb in October but fewer listings will hurt winter buyers

Long Island home prices fell short of this summer’s record highs in October, but a drop in the number of homes on the market this fall suggests holiday-season house hunters will still face plenty of competition, according to new data released Monday.

The median single-family home sale price in Nassau County rose 6.1% to $837,000 in October compared with the comparable figure a year ago, according to the latest data from OneKey MLS, the multiple listing service that covers Long Island.

In Suffolk, the median sale price was $701,000 last month, a 4.6% increase compared with October 2024.

Steady demand for Long Island homes and a limited supply of houses for sale has driven up home prices, and attractive listings at reasonable prices can find a buyer within days of hitting the market, said Pete Morris, co-owner of Signature Premier Properties in East Northport.

“There’s just too many buyers, and even though inventory is starting to catch up, the demand is still unbelievable,” he said.

Still, Morris said sellers and their agents should be careful to avoid asking too high a price, which he said has led to some price reductions in recent weeks.

Prices have come down from the record highs achieved in recent months. The median price reached all-time highs of $720,000 in Suffolk County in September and $875,000 in Nassau County in August. 

Home price data is typically analyzed on a year-over-year basis to account for seasonal differences in the real estate market. Median prices for the market tend to decline in autumn and rise again in the spring.

Valdrin Mulaj, a real estate agent at Daniel Gale Sotheby's International Realty in Smithtown, said even this fall he has worked with several buyers who have offered $50,000 over a seller's asking price and still lost out to another bidder.

"The houses listed at the right price, there are multiple offers," he said.

A shortage of homes on the market has helped fuel competition, and that condition didn’t improve in October. The month ended with 4,956 single-family home listings, which was 10% fewer than at the same time a year ago.

Existing homeowners are choosing to renovate rather than sell and give up a mortgage rate of about 3%, said Tim Galligan, who leads a team of agents at Keller Williams Points North in Woodbury. That leaves only seriously motivated sellers listing their homes, particularly once the holiday season begins, he said.

“People are not going to cough up their interest rate, so it’s been stagnant,” he said.

Despite fewer homes on the market, more houses sold in October than during the same time in 2024. The number of closings last month rose 3.5% year over year to 1,868 in Nassau and Suffolk.

Morris, co-owner of Signature, believes if rates were to fall to 5.5% or lower, more homeowners would look to move.

“They won’t be hostage to their mortgage rate anymore” if rates fell, he said. “With that increased inventory and lower rates, I think houses will become more affordable.”

So far, that hasn’t happened. The average mortgage rate for a 30-year loan was 6.24% for the week ending Thursday, according to mortgage giant Freddie Mac. That’s down from about 6.78% a year ago. Still, the rate hasn’t fallen much since the Fed began to cut its benchmark interest rate last fall.

Lawrence Yun, chief economist at the National Association of Realtors, projected last week the average mortgage rate on a 30-year fixed loan would drop to an average of 6% in 2026. 

“The mortgage rate will be a little bit better,” he said in a statement. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”

But Yun said the greatest affordability improvements will occur in regions with significant new home construction, such as Houston. Long Island and other Northeast suburbs lag far behind parts of the South and West in new home construction. Yun said easing mortgage rates, job gains and improving market stability should support home price appreciation of 4% nationwide next year.

“Next year is really the year that we will see a measurable increase in sales,” he said. “Home prices nationwide are in no danger of declining.”