Overview of LI Real Estate Market 10 Years After the Crash
Long Island was blessed with a busy and bustling year in residential and commercial Real Estate. There was healthy demand for homes, stable office rents, and limited retail and industrial vacancies. Consumer confidence has not been higher since 1999 and 2000, says Ann Conroy, president of Douglas Elliman Real Estate’s Long Island Division. “People trust in the economy on Long Island, people are buying houses. They still know it’s the best place you could put your money… and they believe in the region,” Conroy explained.
Despite the evident growth, the Real Deal had a recent article questioning where the market stands in the aftermath of the 2008 crash. A decade ago, following Lehman’s downfall, the global markets fell into financial crisis. In the fourth quarter of 2008, Long Island condo and single-family home sales fell to 4,427, from 5,292 in the third quarter. By the first quarter of 2009, the number of sales plunged to 2,872, as per data compiled by appraisal firm Miller Samuel for Douglas Elliman.
The question raised is, has the market fully recovered the losses it experienced during the crisis. While 2017 was a vibrant year for the residential real estate market, it still hasn’t reached the heights it hit precrash, Conroy says. “We’re almost there — we’re not there yet.” The median sale price on Long Island single-family homes and condos was at $415,000, as of Q4 of 2017, according to Douglas Elliman. Before the crash, at its peak in the third quarter of 2007, the median price (excluding the Hamptons and North Folk) was $442,380. Just for reference, at the lowest point in the crisis, by Q4 of 2011, the median sales price for Long Island homes had hit $339,000. When gauging the LI housing market based on availability, the Real Deal reported that in Q4 of 2017 there were only 10,273 Long Island homes available in the market. In Q2 of 2008, there were 26,145.
As for Long Island’s commercial market, it never experience the significant downturn that neighboring areas like Manhattan saw, explains Ellen Rudin, the managing director of CBRE’s Long Island and NYC Outer Boroughs offices. “The beauty of Long Island, if you will, is we have not overdeveloped — we didn’t have the lows that many regions had because we’re a very consistent market,” said Rudin. Today’s average office rent is at $27.73, as per CBRE. That is down only by about a dollar, from where it was during the fourth quarter of 2008.
The average asking retail rent per square foot was $27.06 in q4 of 2008, as per Costar data. In Q4 of 2017, the average asking rent stood at $28.53, signifying an increase over pre-crisis levels. Similarly, for industrial spaces, the average asking rent per square foot in Q4 of 2017 was $12.47. That figure exceeds the level during Q4 of 2008, during which the average asking rent was $10 per square foot.
Ann Conroy, president of Douglas Elliman Real Estate’s Long Island Division said, “People trust in the economy on Long Island, people are buying houses. They still know it’s the best place you could put your money…and they believe in the region.”