Despite Low Inventories and Rising Prices, Older Homeowners May Not Be Ready to Sell Just Yet

August 23, 2017

Leading Broker Says Housing Bubble Unlikely

[Plainview, New York] — With the summer almost over, home sales prices are hitting record highs this year. Joe Moshé, Licensed Real Estate Broker, Charles Rutenberg Realty, Inc., is hopeful that the number of home sales will also rise as more put their houses up for sale, but, with many older homeowners continuing to hold onto their homes, low inventories are likely to continue, keeping sales volumes low and prices rising.

Multiple Listing Service of Long Island (MLSLI) recently reported that the median home sales price in Nassau County in July was $525,000, which was 5% higher than in June 2017, when it was $500,000, and 9.8% greater than last July at $478,000. In Suffolk County, last month’s median sales price was $365,000, a 0.6% increase over the previous month’s price of $362,700, and a modest 5.8% year-over-year jump over the July 2016 price of $345,000.

Based on MLSLI data, these sales prices are the highest they have been this year. Since January, Nassau home prices have gone up 10.5% and Suffolk’s have increased 8.1%. Mr. Moshé predicts that, in view of the sales price data from previous years, sales prices will rise again in August, but adds that, with low inventories, sales prices should remain steady throughout the fall and winter, in contrast with previous years, when prices generally slip.

"Many Long Island homeowners are at or near retirement age and you think they would take advantage of these record-high sales prices," Mr. Moshé says. "But they are keeping their houses because they are worried they will not be able to find a suitable place to live. Many are continuing to work past the traditional age of retirement, so they are in no rush to move. Additionally, there are few affordable communities catering to the 55-and-over crowd, and construction for smaller homes is cost-prohibitive. As long as they stay in their homes, inventory will remain low and prices will go nowhere but up."

Looking at the rising sales prices, some believe this is part of another housing bubble that is ready to burst. A survey by ValueInsured reported that 68% of New Yorkers are concerned about an impending correction and that their homes may be overvalued. But with interest rates remaining relatively low, supported by a strong economy, Mr. Moshé says those fears may be unfounded. "Home sales and prices have gone through peaks and valleys over the last few years with no signs of a crash," Mr. Moshé says. "Long Islanders are ready to buy these homes once they go on the market, bubble or no bubble. We are unlikely to see a major correction unless the economy falters and interest rates increase substantially."

The National Association of REALTORS has named Charles Rutenberg Realty, Inc. among the top five firms in New York State. As one of the nation’s fastest-growing Agencies, with nearly 5,000 associated Real Estate Professionals nationwide, Charles Rutenberg Realty, Inc. is proud to serve Long Island and Queens, Brooklyn, Bronx, Westchester, Putnam, Rockland and Orange Counties.

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