Too few houses, high prices

Picture this: 20 to 30 people waiting outside an open house as the coronavirus pandemic drags on.

This scene, and others like it, are what real estate agents in East Meadow, like Richie and Diane Krug of the Krug Team, a subsidiary of Coldwell Banker American Homes, are facing.

“It’s crazy how the market is today,” Richie said, adding that Covid-19 has made things much more difficult. Before the pandemic, people could come into an open house freely, but because of its lingering threat, only one or two families are allowed in at a time.

Real estate agent Tatyana Agron, who works with VI Properties, a Hewlett-based subsidiary of Compass Inc., attributed the overflow of home shoppers to the idea that they are eager to move to Long Island to escape the crowds.

She explained that there has been an influx of people moving to Long Island from urban areas, seeking more space and fewer Covid-19 restrictions. In New York City, for example, vaccination cards were required to enter a restaurant until Monday.

Richie also said that East Meadow is popular because of the schools. Currently, there are roughly 20 houses on the market, he said. In a balanced market, 60 to 80 homes would be available. Similarly, he said, sellers would be lucky if four or five people came to an open house pre-pandemic. Richie said he’s had people offer $50,000 or $60,000 above an asking price and be denied.

The average price of a house in East Meadow right now is about $646,000, Diane said. According to OneKey MLS, a broker listing database that covers Long Island, the Hudson Valley and all five boroughs, the average price of a house on Long Island is about $600,000, putting East Meadow prices above average. “The prices have grown considerably,” Diane said.

Asked if the houses are worth what they’re going for, Richie said, “a house is worth what someone is willing to pay for it.”

The housing market used to have a pretty set schedule for when homes would go on the market and when they would be sold but that isn’t the case anymore, said Richie. “The market used to be related to certain times of the year such as back-to-school time or when school gets out, but that’s no more,” he said. “There’s no rhyme or reason, no particular month anymore.”

What’s happening in East Meadow is happening on the South Shore as well. Guilio Ferrante, an agent with Signature Premier Properties in Wantagh, added that the market is becoming increasingly competitive, creating bidding wars. “It’s frustrating, and I feel sad for buyers looking for their dream home,” Ferrante said. “Nine times out of 10, they’ll get outbid.”

A house in South Merrick recently sold for almost $2.5 million. Agron, who brought the buyer to the home, told the Herald that it will be the highest registered home sale Bellmore-Merrick has ever seen.

The highest-priced house that has sold in East Meadow was $1.2 million. The house closed on Feb. 4.

Another factor that has been hurting buyers is the growth of interest rates, Richie said. “Fewer buyers will be able to qualify for loans because of this,” he said. Right now the interest rates are right under 4 percent and he sees them rising. A good interest rate is around 2 to 3 percent, he said.

For example, with the interest rate being 4 percent and taxes being approximately $12,000, if a buyer was purchasing a $600,000 home, after putting 10 percent down their mortgage would be $3,700 a month over 30 years.

Real estate agents must work harder to find what their buyer is seeking, Richie said. “It’s just that there are no choices for people to pick from,” he said. “People tell you what they’re looking for and what price they want to pay and you used to be able to show them maybe five to 10 houses but now we’re lucky if there’s one to show them.

“I’ve been doing this for 38 years,” Richie said. “And I’ve never seen anything like this.” He said that he doesn’t see the market changing any time soon.

Jordan Vallone and Maria Cestero contributed to this article.