54 LONGISLANDPRESS.COM • APRIL 2021
PRESS HOME
LI HOUSING MARKET
REMAINS RED HOT
continued from page 53
“There is an insatiable demand for
homes right now, and it can't be met
by resales of existing homes, so people
are signing contracts for new homes,”
said Holden Lewis, home and mortgage
expert at NerdWallet.
Low mortgage rates, along with spiking
demand driven by a flight to the
suburbs in search of lower population
density and home office space, have
contributed to a surge in real estate
prices and driven supply to record
lows locally and nationwide. But
mortgage rates, which have hovered
at or near historic lows for months
and contributed to the housing market
bouncing back to above pre-pandemic
levels, are now on the rise.
Conversely, commercial real estate has
the opposite problem. The popularity
of working from home and the exodus
of people from expensive coastal cities
will likely weigh on demand and
change workspace requirements,
leaving office buildings that do not adjust
less valuable. Scott Rechler, chief
“There is an insatiable demand for homes right
now, and it can’t be met by resales of existing
homes,” said Holden Lewis.
executive and chairman of closely held
Uniondale-based RXR Realty, one of
the largest office building owners in
New York State, sees a growing disparity
between high- and lower-quality
properties.
“For buildings that can't do that —
they're not in the right location,
they're older, they're obsolete — it
could be a meaningful free fall in
value,” Rechler said.
LI’s residential real estate crunch has
forced some buyers to forgo turnkey
options and instead buy vacant land
on which they are having new homes
built. About 72.4 percent of homes
sold nationwide in December were
either under construction or yet to
be built.
Higher house prices because of the
tight inventory resulting from lack of
land and very expensive lumber could
push homeownership out of the reach
of many first-time buyers.
The National Association of Realtors
reported that the supply of previously
owned homes available for sale
plunged to a record low in January.
That has pushed buyers toward the
market for new homes. Demand for
housing is being driven by Americans
seeking more space for home offices
and schooling as the yearlong coronavirus
pandemic drags on.
Those willing to endure the renovations
that come with a fixer-upper
have more options.
“There are some really great renovation
opportunities,” Mala Sander, a Sag
Harbor-based realtor with Corcoran
Group, told the Press sister publication
Behind The Hedges. “It’s not a bad
idea to get a house in a great location
that needs some TLC.”
According to a survey of single-family
homebuilders this month, record-high
lumber prices were "adding thousands
of dollars to the cost of a new home and
causing some builders to abruptly halt
projects." Softwood lumber prices
jumped by a historic 73 percent on a
year-on-year basis in January.
"Strong demand, a shortage of supply,
and rapidly rising prices is the perfect
combination of factors that should
convince builders that now remains
a really good time to get the shovels
in the ground," said Joel Naroff, chief
economist at Naroff Economics in
Holland, Pa.
-With Reuters
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