After months and months of massive increases in prices, the question on many people’s minds, be they buyers or sellers, is whether the Long Island real estate market is going to soften any time soon. Nicholas Colombos and Angela Dooley of The Colombos-Dooley Team at Compass Real Estate have some answers.
“We do think the market is going to soften, soon, for myriad reasons,” says Dooley. “One, and the biggest reason—the reason why Long Island for the past year and a half has been so popular and there’ been so much demand—is that the city was in turmoil. But now the city is opening up again and businesses are beginning to come back to the office, so there’s a direct correlation.
“People are going back to the city, and they aren’t necessarily running from the city,” she continues. “So it’s going to soften for that reason alone. You’re not going to have as much demand for Long Island as we have seen in the last year and a half.”
For those fueling the demand here in Nassau and Suffolk Counties, there is a long-time factor that is always in the conversation when it comes to local real estate. It is no secret, but it is one that is coming back into the spotlight.
“Another thing to consider is property taxes are on the rise,” Colombos notes, “and that will soften the asking price, of course, on most homes. While sellers should be grieving their taxes every year, some choose not to, for whatever the reason, and obviously the prices will be affected by that.”
Dooley adds yet another factor she sees having an impact on the Long Island market. Interestingly, it relates to people historically choosing to leave.
“Prior to the pandemic, the goal would be to sell high on Long Island and run to Florida, run to North Carolina, run to South Carolina, because you could get something beautiful there,” Dooley says. “A million dollars here versus a million dollars in Florida, oh my god! But what’s happened is the prices in Florida and North Carolina and South Carolina, they’re skyrocketing. So although you’re selling for a premium, you’re probably paying more of a premium now in Florida.
“So people have stopped that whole concept of moving from here and going south. Because there are no deals south,” she goes on. “As a matter of fact, you might pay a 30% or 40% premium on some homes. That has absolutely softened the Long Island market—there’s nowhere for them to go. That was a very common transition, going from Long Island to Florida, to Palm Beach or the Naples are, and right now you can’t touch them. Anything reasonable is snapped up within a day or two. That natural transition is not happening.”