Housing prices on Long Island have been on the rise for the past few years, due to a variety of factors. However, among the most significant factors in Long Island’s growing real estate prices is an ongoing inventory shortage in the housing market. In other words, there aren’t enough houses available for sale to meet consumer demand, particularly among first-time homebuyers and empty nesters, even though more houses are being constructed, and it is a trend that looks ready to continue well into 2020.
Under the basic principle of supply and demand, a product becomes more valuable as it becomes scarcer. And with housing construction failing to keep up with demand, there are simply too many people competing for too few houses, causing an inventory shortage. This means that the price of existing houses is driven up, as everyone looking to purchase a house seeks to outbid one another for the few homes that are available.
There are a few reasons for this inventory shortage. The first is low interest rates for mortgages, which makes purchasing a house more appealing for those who might otherwise balk at high interest mortgage payments. The second is the increase of millennials looking to purchase their first home, who, until recently, preferred to rent rather than purchase real estate. Finally, many homeowners have been declining to sell their current homes, keeping existing houses off the market. The effect is particularly pronounced on lower-end properties, which have become especially appealing due to their generally lower property taxes, now that SALT deductions have been capped. Ironically, higher-end properties have not been as affected by this trend, because their higher property taxes make them less appealing to potential buyers.
In this environment, it’s more important than ever to have a real estate agent who can serve your needs and help you find the perfect home for you. Charles Rutenberg Realty is one of New York’s largest Real Estate agencies with multiple offices providing a full suite of real estate services, including residential and commercial sales or leasing. We serve clients in Nassau, Suffolk, Queens, Kings, Bronx, Westchester, Putnam, and Orange Counties, and bring our knowledge and experience to bear in every transaction. If you are interested in buying, selling, or leasing real estate, give us a call at 516-575-7500 or visit our contact page.
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