Prudential Douglas Elliman Long Island Market Overview Q1 2009

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Long Island - Price indicators continued to decline

(LONG ISLAND, NY) -- The median sales price of a Long Island property was $355,000 in the current quarter, down 13.3% from $409,500 in the prior year quarter. The median sales price has fallen to a level last seen five years ago in the first quarter of 2004 when the median sales price was $353,058. Average sales price was $416,646, down 16.5% from $499,056 in the prior year quarter.


Both inventory and number of sales declined

After peaking at 26,145 units in the second quarter of 2008, the number of listings has generally trended lower. There were 22,942 listings at the end of the first quarter, down 4.4% from 24,003 units in the same period last year. Listing inventory did rise 10.7% from the prior quarter, but this was a seasonal increase and lower than in four of the past five years during the same period. Inventory levels have been stabilizing over the past two years, however, the level of sales activity has been declining over the same period. There were 2,872 sales in the first quarter, 18.2% below the 3,513 sales of the same period a year ago. As a result, the monthly absorption -- the number of months it would take to sell all existing inventory at the current pace of sales -- was 24 months, up from 20.5 months in the same period last year.


Both listing discount and days on market increased

The spread between the contract price and the list price at time of sale was 8.6% in the first quarter, up from 7.3% in the prior year quarter and the highest of the five years this metric has been tracked. The average days on market were 134 in the first quarter, up from 128 days in the prior year quarter. The high level of inventory, coupled with the lower pace of sales activity led to longer marketing times and greater negotiability because of increased competition and lower demand.

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Nassau Market - Listing inventory stabilized as number of sales fell

There were 9,843 properties listed for sale at the end of the quarter, essentially unchanged from the 9,862 properties available at the same time last year. There were roughly 50% more properties available for sale in the first quarter than the same quarter five years ago. There were 1,364 sales in the first quarter, down 24.1% from the 1,796 sales in the prior year quarter. The combination of stable inventory and a sharp decline in number of sales resulted in a jump in the monthly absorption rate to 21.6 months, from 16.5 months in the same period last year. Despite the rise in the absorption rate, the days on market remained at 125 days, unchanged from the same period a year ago.


Price indicators fell as listing discount edged higher

The median sales price of a Nassau property fell below $400,000 for the first time in five years, reaching $396,063 this quarter, down 11.9% from the $449,500 median sales price of the same period last year. The average sales price saw a similar trend, declining 19.1% to $476,596 from $589,259 in the prior year quarter. The listing discount edged slightly higher this quarter to 9.1% from 8.9% in the prior year quarter.

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Suffolk Market - Listing inventory and the number of sales declined

There were 1,508 sales in the first quarter, down 12.2% from the 1,717 sales of the prior year quarter. Despite the decline in the level of activity, listing inventory slipped 7.4% to 13,099 units from 14,141 units in the prior year quarter. Listing inventory appeared to peak in 2008 after rising continuously since 2005. Days on market expanded over the past year to 143 days from 132 days in the prior year quarter. Despite the drop in inventory, the sharp decline in number of sales resulted in an increase the monthly absorption rate to 26.1 months, from 24.7 months in the same period last year.


Price indicators declined as listing discount expanded

The median sales price of a Suffolk property was $315,000, down 12.5% from $360,000 in the prior year quarter, the lowest level since this metric was tracked for this study, beginning in the third quarter of 2003. Average sales price showed a similar trend by falling 10.4% to $362,420 from $404,703 in the prior year quarter. Listing discount expanded to 8.1% from 5.6% in the prior year quarter as a result of the lower level of sales activity during the quarter causing more negotiability in the typical sale.

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North Shore Market - Number of sales fell sharply, price indicators declined

There were 216 sales for the quarter, down 40.3% from the same period last year with 362 sales. The median sales price was $653,000 for the quarter, down 12.9% from the same period last year, which had a median sales price of $750,000. Average sales price fell 18% to $861,260 from a $1,050,561 average sales price in the prior year.


Days on market and listing discount improved

The days on market for the first quarter slipped 1.5% to 135 days from 137 days in the same period a year ago. Listing discount was 12.3% in the first quarter, down modestly from 13.4% in the prior year quarter. The contraction of both of these market indicators was unexpected given the sharp decline in the number of sales.

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Middle Island Market - Number of sales and price indicators declined

There were 1,005 sales in the quarter, down 19.3% from the same period last year with 1,245 sales. Median sales price was $380,000, down 10.6% from $425,000 in the prior year quarter. Average sales price followed the same pattern with a 7.1% decline to $436,070 from $469,645 in the prior year quarter. Middle Island is the largest submarket with 35% of all Long Island sales for the quarter, essentially unchanged from the 35.4% market share of the same period last year.


Listing discount expanded as days on market remained unchanged

Days on market for the quarter was 122 days, essentially unchanged from 121 days in the same period a year ago. The listing discount for the average property was 7.7%, up from 6% last year at this time.

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South Shore Market - Number of sales dropped as listing discount expanded

There were 513 sales in the first quarter, down 24.1% from the 676 sales in the prior year quarter. Over the same period, the listing discount expanded to 8.7% from 7.2% suggesting that the lower level of activity has brought increased negotiability. However, days on market, which would be expected to expand during periods of declining sales activity, actually slipped 2.1% to 138 days from 141 days in the prior year quarter.


Price indicators continued to show decline

Median sales price was $310,000 in the first quarter, down 13.9% from the same period last year with a median sales price of $360,000. Average sales price showed the same pattern with a 15.9% decline to $347,119 in the first quarter from $412,786 in the prior year quarter.

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Condo Market - Price indicators declined

The median sales price was $240,000 this quarter, down 7.5% from $259,500 in the prior year quarter. The number of sales dropped 24% to 371 sales in the current quarter, from 488 sales in the same period last year. Condos represented 12.9% of all sales on Long Island, down slightly from 13.9% in the prior year quarter.


Days on market and listing discount expanded

Listing discount expanded to 7.7% from 6.4% in the same period last year. Days on market averaged 157 days in the current quarter, 18 days more than the 139 days in the prior year quarter.

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1-3 Family Market - Number of sales declined as listing discount rose

There were 2,501 sales during the first quarter, down 17.3% fewer than the 3,025 sales to occur in the same period last year. The 131 days on market average of the first quarter was up slightly from 127 days in the same period a year ago. This property type has the largest market share in the study, representing 87.1% of all sales in the first quarter.


Price indicators declined as listing discount expanded

The listing discount was 8.7% in the first quarter, up 13% from 7.7% in the same period last year. Median sales price declined 11.9% to $370,000 from $420,000 in the prior year quarter. Average sales price was $436,009, down 17.4% from $527,644 over the same period last year.

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Luxury Market - Listing discount and days on market slipped

The listing discount was 12% in the current quarter, down from 12.9% in the same period last year. Days on market showed a similar pattern slipping to 143 days this quarter, nearly a week less than the 149 days on market average of the prior year quarter.


Price indicators fell from same period last year

The median sales price was $895,000 in the first quarter, down 16.7% from the $1,075,000 median sales price of the same period last year, the largest decline of all markets analyzed in this report.

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