Buffalo's risk of a decline in home prices is tiny, report says
Survey puts risk at less than 1%
Buffalo Niagara remains at minimal risk of home price declines over the next two years and is still one of the most affordable markets in the country, according to a new survey.
The summer edition of PMI Mortgage Insurance’s U. S. Market Risk Index said Buffalo Niagara faces a less than 1 percent risk of its housing prices being lower two years from now, the lowest-possible risk rating in the survey. More than half of the 381 metro areas in the survey, which was based on first-quarter data, were rated as having a less than 1 percent risk of a price drop in two years.
Buffalo Niagara is known for a housing market that tends to avoid dramatic swings either up or down in prices. PMI said its risk of a price decline in the next two years was minuscule compared to the region rated at the greatest risk: Riverside, Calif., at 95.5 percent. The National Association of Realtors said Buffalo Niagara’s median sales price in the first quarter was $96,600, compared to $287,100 in Riverside, Calif.
Markets that enjoyed large price run-ups during the national housing boom are now facing the greatest chance of price declines, PMI said. The 15 regions rated at highest risk were in four states: California, Florida, Nevada and Arizona.
In those high-risk markets, the chance of price declines continued to intensify, from the fourth quarter of 2007, driven by higher foreclosure rates, PMI said. But in most other parts of the country, the risk continued to decline.
The survey pegged Buffalo Niagara’s home price appreciation in the first quarter at 0.64 percent from a year earlier. The largest percentage drop in that category was in Stockton, Calif., which recorded a decline of 21.51 percent.
A separate report by the Office of Federal Housing Opportunity Oversight said that U. S. home prices nationally fell 4.8 percent for the 12 months ending in May, and since the April 2007 peak, prices have fallen 4.9 percent.
In contrast, home prices in the Buffalo Niagara region increased by an annual rate of 3.69 percent during the first quarter, the federal agency said.
On PMI’s home affordability index, Buffalo Niagara had the fourth highest score, though it was down about 2 percent from the fourth quarter. The index measures how well home prices in a given market match up with incomes, but does not include taxes paid on a home.
The affordability ratings improved from the fourth quarter in about 70 percent of the metro areas in the survey.
