Long Island Real Estate in 2025: What Home Sellers and Home Buyers Need to Know

The Long Island real estate market has been a roller coaster ride for several years, and starting 2025, both buyers and sellers have to adapt to a transforming environment at a breakneck pace. With mortgage rates in a state of flux, shifting inventories, and housing values leveling out, having an awareness of how to move through it is critical. Buying your dream home or selling your property for a record price, below is information regarding Long Island real estate in 2025 that you have to understand.

Home Prices: Not a Reboot, but a Squeeze

After years of hyper-appreciation, Long Island’s real estate market is seeing a long-awaited rebalancing act. Nassau County’s median price stands at **$695,000** according to the **Long Island Board of Realtors (LIBOR)**, with Suffolk at **$610,000**—a mere **1.8% drop** in a year. Home values, even at record high, no longer have buyers in a bidding-frenzied state. Sellers in a few cases **finally are taking price drops** in stride, but high demand locations are holding strong. Home buyers, meanwhile, have seen a drop in housing affordability to **78**, with many working-class buyers no longer qualifying for a mortgage under current terms.

Mortgage Rates: The Wild Card in 2025

If you’re wondering why housing isn’t dropping in price, look no further than mortgage rates. In early 2023, they peaked at **7.5%,** and even with a dip recently to an average of **6.5-6.8%** for a 30-year, fixed-rate mortgage, they’re **double 2021’s level**. That’s taken a big bite out of purchasing power—monthly payments for a $500,000 mortgage run **$1,200** higher** than four years ago**. For many aspiring homeowners, that’s a matter of **downsizing dreams** or **delaying homeownership** altogether.

Inventory Levels: Higher Variety, Not Yet Optimum

One of 2025's most significant turns is a larger pool of housing for sale. **Active listings have gone up 15% over last year**, but **remains 30% below pandemic lows**. Home owners don't desire to give up a 3% mortgage for a 6.5%, and many of them are holding out, thus creating a "rate lock" that continues to constrict housing supply when it doesn't have to. That being said, older, overvalued, and less desirable school district housing stays on the market for a long time—leaving sellers to **be real with pricing and with improvements**

Luxury and Waterfront Properties: Sustaining a Sizzling Trend

While the overall marketplace is re-adjusting, **Long Island’s high-end and coastal properties remain competitive**. North Shore, Hamptons, and South Shore coastal communities have high demand, with coastlines appreciating 8-10% over a one-year span with little availability. High-net-worth buyers, many of whom pay in **all cash in an effort to circumvent high-interest-rate financing**, preserve price integrity in these high-end markets. As a seller of a high-end property, **your pool of buyers is strong—but your buyers have increasingly high expectations for modern amenities and move-in-condition**

Renting and Buying: A Costly Argument

For those deciding between buying and renting, **rents in Long Island have reached record high**. For a **two-bedroom apartment, $3,400 a month** is the price, a **9% increase over a year ago**, and thus, renting is an expensive option. With a **3.2%** vacancy in rentals, competition is stiff. Most renters opt for buying—even with high-interest mortgages—because simply, they don’t want to go on throwing dollars at ever-growing payments for rentals. First-time buyers, though, can count on **larger down payments, increased insurance, and stricter lending terms**.

What Sellers and Buyers Need to Know

For **buyers**2025 will present an opportunity but patience will pay off. **Higher inventories and less competition mean bargains** but price is a stumbling block with mortgage rates in tow. As a buyer, **be prepared and move with dispatch when a reasonably priced property comes onto the marketplace** and cash buyers will have a strong bargaining position in particular.

For **sellers**Getting pricing correct is of paramount importance. **Default over-asking bids** days have long gone, and, as a consequence, competitive pricing, improvements, and staging will become a necessity. Clean, tidy, and in a desirable location, such property will sell, but overprice and its owners will enjoy a long, slow sales period in store for them. A successful ploy? **Create incentives such as closing cost rebates or rate buydowns** to attract additional buyers.

Final Thoughts: What to Do in 2025

Long Island real estate keeps transforming, and 2025 will become a year of **sensibility and wise decision-making**. There will be more choices for buyers, and sellers will have to adjust to new realities, with trends shifting towards **a leveler field**. Upsize, downsize, or make an investment – whatever your purpose, knowing your numbers and taking **informed, fact-based decisions** will be key.

The market is shifting, and whether you’re buying, selling, or investing, having a strategy is more critical than ever. Don’t go in blind—get expert insights, personalized advice, and a plan tailored to maximize your success in this evolving real estate landscape.

📩 Email me at Dean@TheBeaconTeam.com
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