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Housing market pace is slowing BY RANDI F. MARSHALL, Newsday Staff WriterNewsday Long Island April 18, 2006 Say one last farewell to the housing boom. In the clearest evidence to date of a housing market shift, the latest Long Island data showed Nassau County's median home price rose only 4.4 percent from March 2005 to March 2006 - the smallest annual price gain since May 1998. Nassau's median home price stood at $470,000, the same level it was in June 2005, according to the Long Island Multiple Listing Service. Suffolk County reported a 6.2 percent yearly jump, to $396,800. Queens is still far stronger, with a median price of $475,000, a 13.1 percent gain from March 2005. While that's nowhere near a housing market collapse, it's certainly a sign of significant change that could impact the regional economy. Adding to the pile of evidence, the number of homes for sale is still 74 percent above last year's levels for the three counties, while closed sales in the region are down 6.7 percent. Indeed, the supply of homes is far higher than last year. Based on the current selling pace, it would take more than eight months to sell the total supply of Nassau homes for sale, and nine months to sell Suffolk's inventory, the highest since 1998. The numbers aren't a surprise and some are expecting more to come. Ed Gitlin, a broker for Century 21 Benjamin, with offices throughout Long Island and Queens, said he foresees 10 percent annual price declines on Long Island - perhaps as soon as June. Queens, he said, is more protected because of lower prices and taxes than Nassau County. While there are more homes on the market because of the slowdown, the larger inventory data is also attributable to greater use of the MLS itself, said Frank Dell'Accio, who heads Century 21 AA Realty in Lindenhurst. Dell'Accio said March closings data represent sales from the slower winter market. The slower market could affect the overall economy, too, as some consumers may slow spending to make up for higher interest rates or lower housing values. "Borrowers were using their houses like ATM machines," said Bob Moulton, president of Americana Mortgage Group, a mortgage broker in Manhasset. "They were taking the money out to buy cars or go on vacation, and it's got to have some trickle-down effect." But some homeowners may spend as much as before if they continue to see their properties as a source of wealth. "It depends on consumer psychology, whether the wealth effect trumps or home price trends trump," said Pearl Kamer, the chief economist of the Long Island Association. That's especially true since no one knows how high interest rates will go. Nonetheless, optimism remains. "I believe we're still going to have a good real estate market this year," said MLS president Christopher Armstrong, broker for Century 21 Princeton Properties in Holbrook. Median home prices SUFFOLK March '05 $373,800 March '06 $396,800 Up 6.2% NASSAU March '05 $450,000 March '06 $470,000 Up 4.4% QUEENS March '05 $420,000 March '06 $475,000 Up 13.1% SOURCE: Long Island Multiple Listing Service
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