By Jane Qi
Sotheby’s International Realty is a global luxury real estate brand with over 1,000 offices and 24,000 sales associates worldwide. Daniel Gale Sotheby’s International Realty represents Queens and Long Island with 25 offices and 900 sales associates. We spoke to Deirdre O’Connell, the chief executive officer of Daniel Gale Sotheby’s International Realty, about the real estate market on Long Island during the pandemic.
The Market Before and After COVID
According to Ms. O’Connell, the overall real estate market on Long Island has taken interesting turns over the past couple of years. In the early months of 2019, the market stalled a bit due to buyers pushing back on pricing after a price surge in 2018. Shortly before the pandemic began, the market had started to open as prices began to adjust to reflect what buyers were willing to pay. Then the pandemic hit, and things came to a stop. However, the real estate market on Long Island was back on track by mid-summer 2020 and continues to be extremely strong today.
O’Connell indicated that the current market is at levels that have not been seen since 2005 and 2006, particularly in the high end. “Our high end had been at a stall and has not sold at this level since that time,” she said. There were a lot of foreign investors coming in and buying the high-end estates about 10 years ago, and when that group of buyers left the marketplace, the high-end market really struggled. The five boroughs, on the other hand, are coming back a little more slowly, particularly in Manhattan, but are absolutely coming back.
Great demand is being seen on the eastern end of Long Island, the secondary home market. “People are continuing to re-evaluate how they live—across the board,” O’Connell said. People who are committed to staying in Manhattan are moving to larger apartments, so they have more space. Those that have purchased something on the East End where they will spend most of their time, are also buying something smaller in Manhattan, so they can work a few days in the city and then go to their escape house out East. Across the board, people are purchasing because they’re changing how they’re living.
How to Prepare for the Current Market
Ms. O’Connell stressed the difficulty of purchasing in the current market. Buyers have to be really well-prepared. A preapproval is a prerequisite. With demand high and low inventory, the market is extremely competitive. You need a professional to help you navigate the details of the process and ensure you are successful. She said that it would be very frustrating to go to countless properties, put in countless offers, and never secure a home.
“Sellers need to be prepared as well.” O’Connell added. It’s important to work with a real estate professional who will make sure your home is staged well and priced properly. If your property is priced right, chances are you may get more than you are asking, and more importantly, you will sell it with the best terms. “While we have a great demand for homes, those that are overpriced are still sitting. Despite the tight inventory, buyers still aren’t willing to overpay,” O’Connell said.
Some sellers may be a bit nervous about putting their houses on the market without another home to go to. However, there is no better time to sell in advance, as it is not often that there are so many cash buyers. If you’re able to sell with no contingencies and cash, then you’ll go into the market a stronger buyer with cash in hand.
Trending Features and Amenities
“Right now, on Long Island, everything is in demand, particularly if it’s finished,” O’Connell said. Buyers don’t want to have to fix up homes right now, for two reasons. First of all, interest rates are currently very low. Buyers want a home that is completely done, so they don’t have to spend money on repairs. Secondly, building supplies are very expensive and hard to get. Any type of construction is now more expensive and taking much longer. Because of this, properties that are ready to go are strongly favored.
Since people are still recovering from the pandemic, most are looking for a little more room in a home—whether that’s an extra bedroom or more office space. Pools are still a very popular amenity. Spacious yards and green spaces are also sought after. Buyers want to make sure they have space to relax outside and enjoy outdoor activities.
“Pre-COVID, people were looking for houses as a place to sleep, and all other activities were outside the house. They’d eat out, they’d play out, and they would work out,” O’Connell said. “Now, they want to be sure that they can also do some of that at home.” After going through the pandemic, many have reconsidered what “home” means to them. More people want to actually enjoy living in their houses, rather than viewing the house as simply a place to come back to after a long day away.
