Escape to Long Island? Prices are rising, but it's still a relative bargain

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For New York City-dwellers looking for more space for less money and access to the outdoors, there are four places they usually go: Long Island, Westchester, Connecticut or New Jersey. This week we're turning our attention to Long Island, via Douglas Elliman's second quarter market report for the area.

Assuming it's a single-family you want (and that's what it'll take to get you to ditch city life), here are the numbers you need to know: The median price for a single-family home on Long Island is $390,000 (up 4.6 percent year-over-year). Houses in Nassau County, which are much more commutable to the city, are about $100,000 more, on average, than those in further Suffolk County, according to Jonathan Miller, author of the report.

The median price overall for Nassau County is $439,000. For Suffolk County (excluding the Hamptons and the North Fork), it's $317,500. Both are up 5.8 percent from the same time last year.

Now, let's compare those prices to the other suburbs: In Westchester, the median price for single-family homes is $650,500 (essentially flat compared to last year) and in Fairfield County, Connecticut, the median price is $480,000 (down 2 percent year-over-year). So the prices go, from highest to lowest: Westchester, Fairfield County and then Long Island.

"In the last couple of quarters, we've finally started seeing sales activity rise on Long Island," says Miller. "And prices are rising faster than they have in years," he says.

Miller says Long Island took a bit longer to see its prices increase as compared to the city because most buyers there rely on standard, conforming loans backed by Fannie Mae and Freddie Mac. Those were tougher to get after the economic downturn in 2008. (Many NYC co-ops and condos cost more than the conforming loan threshold of $625,500, and buyers aren't relying on Fannie and Freddie.) For that reason, Long Island's real estate market reflects the rest of the country more than the city.

Long Island's luxury market is seeing bigger price jumps. The median price rose 7.6 percent, to $1.075 million during the second quarter (the luxury threshold is $782,500). "Price growth at the higher end accelerated faster," says Miller, "and that has a lot to do with the North Shore/Nassau and its linkage to the city, and the city's improved economy."

Inventory for luxury properties  is up 3.8 percent. What that shows, says Miller is that  "when inventory rises, that doesn't mean prices necessarily drop, it just means it gives buyers more options."

Below, two homes around the median, and one that hits the luxury threshold:

A three-bedroom, two-bath Hempstead home (in Nassau County) with a fireplace on a tree-lined street with a brick patio and private backyard. Asking price: $449,000.

A two-bedroom, two-bath Bellport home (in Suffolk County) with a finished basement and covered patio. Asking price: $319,000.

This five-bedroom, three-and-a-half-bath Bellmore house (in Nassau County) is on the water. Asking price: $799,900.


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