Western New York’s housing market is continuing on its hot streak this summer, driven by continued low interest rates, rising consumer confidence and a shortage of available homes for sale that is creating a very competitive market for many desirable homes.
Home prices in June matched the highest median level ever for Western New York, while sales surged to the second-highest level for any month in the last three years, as the spectre of rising interest rates drives buyer activity.
“It is a hot, hot, hot market,” said Tammy Capozzi, a broker with M.J. Peterson Corp. “Buyers are out in full force. Even though interest rates have crept up a bit, it has not stopped the buyers from purchasing at record levels.” The median sale price rose 6.3 percent from May to $130,000, according to new data from the Buffalo Niagara Association of Realtors. That’s tied with June 2012 for the highest level. The median price means half sold for more and half sold for less. The average price hit $159,212.
“The prices aren’t flat in Elm-wood Village, not flat in Allentown or the Middlesex area. There are big numbers that just happened in the last 30 days,” said Susan Lenahan, head of the city office for M.J. Peterson Corp. “Our neighborhoods could not be more active.”
Business is up significantly at 2.5% Real Estate Direct, where two of the brokerage’s new agents this year are “routinely” listing and selling homes with prices around $200,000 – which is “very high for new agents,” said owner Jed Carrol. Homes listed through Carrol’s other real estate firm, America’s Choice, are also going for high prices, with a home on Graystone Lane in Orchard Park selling for $400,000.
Meanwhile, closed sales in the eight-county area of Western New York rose 5.8 percent from a year ago to 981 in June and were up 12.5 percent from May. Since June 2010, only the tally for last August was higher.
For the year to date, closed deals rose 5 percent to 4,358.
“We’re still having a great market,” said Louis Vinci, president of BNAR and a broker at RealtyUSA. “Sales are up, and we’re still getting multiple offers. Certain areas are still very hot.”
And the likelihood of the Federal Reserve halting its efforts to spur the economy and instead raising rates in the near future to avoid inflation means homebuyers feel more compelled to act now if they’re on the fence.
“I think people overall feel more confidence in the state of the country and the slow rebound from the recession but, more importantly, locally people are finally feeling and seeing some forward motion with things like waterfront development, the medical campus and other major investments,” said Jean-Michel Reed, a broker at Gurney Becker & Bourne. “These things do trickle down and give people more confidence in both being in Western New York and investing themselves in it.”
Indeed, pending sales – where a contract has been signed – rose 5.5 percent to 1,040 in June and are up 7.1 percent so far this year, to 5,691. That indicates that the activity is going to continue into the summer.
“There are not enough hours in the day for us right now,” Lenahan said. “The phone continues to ring and ring and ring. I never get through the day on a (cellphone) charge.”
Nationally, research firm CoreLogic reported that home prices rose 11.9 percent in June from a year ago, representing the 16th straight month of a national increase from the year before. That’s also the fastest pace in seven years.
Compared with May, prices rose 1.9 percent. Its index of pending sales projects prices will rise 12.5 percent in July from a year earlier and 1.8 percent from June. So far this year, prices are up 10 percent across the country. Statewide, prices were up 8 percent in June.
“This trend in home price gains is moving at the fastest pace since 1977,” said CoreLogic chief economist Mark Fleming.
The lack of inventory is a big factor. The number of homes for sale in the region fell 15.8 percent to 5,153 in June from a year ago, marking the 12th straight year-over-year decline. But inventory has been rising steadily since March, when it hit its lowest point since March 2005. It rose 1.8 percent from May.
“The market is very, very robust. There’s a shortage of everything,” Lenahan said. “If I had more inventory, I could sell more houses. There are more buyers than there are properties available, and it’s hard to understand why these sellers won’t take advantage of this market.”
Homes in June spent an average of 64 days on the market, down from 68 a year ago. “The market is still hot, multiple offers are the norm and time on market is quick,” said John Leonardi, BNAR CEO.