During the beginning of 2016, home sales on Long Island had actually dipped downward. Whether or not it was just a natural seasonal decline, The National Association of Home Builders (NAHB) has reported positive turnarounds for the month of June. This is great news for the construction industry on Long Island.
It has been a struggle for Long Island to recover from the economic downfall that occurred almost a decade ago, where the housing market was gravely impacted. At the end of the 1st Quarter, the housing market index for home sales expected over the next six months was much more optimistic than it has been in a long time. Long Island will most likely see an increase in listings and many more interested buyers.
On Long Island, the home sales are booming in all counties. According to the Multiple Listing Service of Long Island (MLSLI), the median home price on Long Island for the month of May was $397,500, which was a 3.8% increase from May 2015. The amount of single & multi-family homes sold in May of 2016 in Suffolk County was an astonishing 961, which was only 834 a year ago.
The mortgage market has been heating up over the past couple months and shows no signs of slowing down. The most active segment of the business is the purchase market; most houses are going for asking price and in some cases, results in a bidding war. Rates holding steady for a 30 year mortgage at 3.75 and lower has complemented a business that has been waiting for a good steady turn around,” says Glenn Dube of Cliffco Mortgage Bankers in Westbury.
Nineteen percent of surveyors from a national housing survey associated with Fannie Mae indicated that it is a great time to sell. Additionally, it has been reported that seventy-two percent of those surveyed feel it is a great time to purchase a home. This is a tremendous confidence booster to the housing market across Long Island. With the descent in mortgage rates, some surveyors theorize that home prices may grow one and a half percent in the next year. Fannie Mae surveyors believe mortgage rates will begin to slowly rise over the next year. Based on this, we’re expecting to see a lot of action in the housing market for the remainder of 2016!
Construction companies on Long Island will most likely see rapid growth in their business along with some inevitable growing pains in the following areas:
- Increased need to hire subcontractors
- Additional payroll & related fringe benefits
- Adequate insurance coverage
- Cash flow management and financing needs
- Tax planning for increased profits
Kimberly R. Roffi, CPA
Kim, who has been a member of the firm since 2001, has over 19 years of public accounting experience. Today, she is a partner of the firm and previously served as Director for the firm’s tax and business advisory practice and Director of Finance and Operations for the firm internally. Kim has written Practice Insights for Lexis Nexis’ tax research platform and has been published in Building Long Island magazine.