LI's North Shore residential market still blooming, despite lack of supply

Real Estate Weekly, March 13, 2002 by Louise P. Brooks, Patricia McCormick, Karen Newhouse

The residential real estate market on the North Shore of Long Island, where Insignia Douglas Elliman remains a strong presence with some 85 brokers operating from three offices, continues to boom despite a persistent problem: More eager would-be buyers than product to satisfy the demand. The scarcity of houses coming onto the marketplace has been a long-standing problem on the affluent North Shore.

Overall, in Nassau County home sales in 2001 continued at a brisk pace, both in volume and in transactions, surpassing the high levels achieved in 2000, which was considered a record year. The impact of Sept. 11 was relatively subdued in suburbia, and as a result 2001 ended as a much better year than some of us expected. Immediately after Sept. 11, the market slowed down for about three or four weeks - as it did everywhere in the nation. But business quickly picked up again early in 2002. There were scattered instances of people wanting to move here from Manhattan for security reasons, but this is a negligible factor in what is shaping up to be a strong year for North Shore real estate.

Instead, residential real estate on the North Shore is returning to business as usual because people are feeling optimistic, the economy seems to be improving and they want to come here for the same reasons they did before. They're starting families and they want space, lawns, trees and the fine schools throughout the North Shore. The North Shore's award-winning public schools are a major selling point to people coming here from Manhattan, who no longer need to pay the high tuition fees charged by private schools in the city.

Prices rose 13% in Nassau County in 2001 and continue to climb. House prices on the affluent North Shore range from about $450,000, which in this market is the low end, to an average at the high end of $6 million, with some estates selling for much more. Houses in the $800,000 to $900,000 range just fly off the market.

However, interest rates have never been so favorable on the North Shore, now at a low 6.5% on a 15-year mortgage with no points. The low interest rates are highly favorable to sellers and further stimulate demand in a market with such limited inventory.

The whole market is skewed here, because of the shortage of product and of available lots, which is why people moving to the North Shore may spend huge sums on houses they will tear down so they can build their dream homes.

People still regard real estate as a sound investment, much better than the stock market. For the most part, home buyers in this market want to scale up. Others want to stay in the community but want to scale down because they are empty nesters. We can sell their homes easily but then there is the problem of finding them smaller homes.

As the weather becomes nicer on the North Shore and the foliage blooms again, the market will become more active. The seasonal change to spring means more properties will be up for sale. At this time, people combine a pleasurable jaunt in the country with home hunting, and sellers will invest in new paint jobs to make their properties more attractive. We only wish we had enough listings to fulfill right away everyone's desire for a North Shore house.