Reversing recent monthly trends, home sales in September took a sudden dive, dropping 14.5 percent from a year ago, according to a new report from the Buffalo Niagara Association of Realtors.
But pending sales increased yet again, as did home prices, while record low interest rates continued to drive activity.
The trade group reported Monday that closed sales fell from 910 to 778, and sales plunged 29.5 percent from August – a far bigger drop than the 4.6 percent decline over the same two months in 2011.
The sharp drop follows seven straight months, and 10 of the last 11 months, of year-over-year gains in completed transactions. For the first nine months of the year, closed sales are up 6.4 percent to 6,950 from 6,533.
BNAR officials could not be reached for comment Monday. BNAR reports sales by its members in the eight-county Western New York area, as well as some in Livingston and Monroe counties.
Pending sales – where an agreement has been signed but the sale has not closed– have been up every month for the past 12 months, averaging 10.8 percent. So far this calendar year, pending sales are up 11.9 percent to 8,051, and they were up 5 percent just in September, to 802 from 764.
Real estate agents and executives were puzzled.
“I’m not sure how BNAR monitors that,” said Peter Hunt, CEO of Hunt Real Estate Corp., the region’s No. 2 real estate brokerage firm. “It could be suspect in its reliability because it is dependent on how each brokerage defines closing and reports those numbers.”
And Hunt said his family-owned firm didn’t see that kind of drop. “September was a strong month for us,” he said. “If there was a bubble in August, that would help lead to a drop in September, but September was a strong month for Hunt.”
Meanwhile, the number of homes newly listed for sale fell 8.2 percent in September, to 1,295. As a result, the entire supply of available homes for sale plunged 17.4 percent to 5,707.
Homes are selling a little faster, spending 64 days on the market, down 5.9 percent from 68 days a year ago. At that rate, the current inventory of homes would last seven months, down 25.5 percent from 9.4 months a year ago.
“Here in the city we are seeing a huge shortfall of inventory. This listing shortage is having a big drain on sales in the city of Buffalo,” said Bret Llewellyn, branch manager for Realty-USA’s Metropolitan Office on Elmwood Avenue in Buffalo.
“We are seeing potential sellers holding onto their primary home and making the necessary upgrades to make them more attractive to themselves and to the potential buyer down the road ... Counter this with a large contingent of first- and second-time home buyers clamoring for a home while interest rates remain at these rock-bottom historic rates and you have a very unusual dilemma.”
And the scarcity factor appears to be helping home prices. The median price – meaning half sold for more and half for less – rose 4.9 percent to $125,000, while the average rose 5.8 percent, to $145,656. For the year to date, the median rose 2.9 percent to $120,000, while the average was up 3.9 percent to $143,174. Sellers received 95.5 percent of their asking price. All figures are the highest for the month in at least two years.
“Overall, this has been a wonderful market. As a matter of fact we’re still going strong this November,” said Ann Edwards, broker and owner of Realty Edge in Amherst. “We continue to see strong interest and buyers still want to take advantage of those great mortgage rates. We love it. This market is keeping all our agents busy.”