Western New York’s housing market gained steam as the temperatures outside rose, with more homeowners listing their properties for sale in June and more homebuyers signing deals as summertime got underway. But prices for homes that closed that month fell.
The latest figures from the Buffalo Niagara Association of Realtors demonstrate a newfound confidence among consumers, both in the housing market overall and in their individual financial circumstances.
Buyers and sellers have been hearing about booming home sales, multiple offers and rising prices for two years, as the low inventory in certain popular areas has driven up competition for good homes that sell for above the asking prices.
Yet many homeowners held back from joining the party, either out of continued concern about the economy or simply because they had such a good deal on their existing home that they had no incentive to move.
But conditions may finally be loosening.
“A lot of people that were thinking about listing down the road are hearing about multiple offers and people getting really good offers for their homes,” said Hunt Real Estate Corp. broker Annabelle Aquilina, who has seven listings currently under contract. “So they’re thinking we might as well jump in, because this might be the right time. Some of them are people I’ve worked with for a while.”
Take Barbara Shaw. The 64-year-old speech pathologist at Kenmore Mercy Hospital is retiring in October after 26 years, and plans to move to Florida, where she already bought a foreclosed home.
So Tuesday morning, she listed her home on Breckenridge Street in the Elmwood Village for $279,900. An open house is scheduled for this weekend.
“I’m not listing it because home values are going up. This has been my plan for the last year and a half,” she said. “I hope I bought in Florida at the right time, and I’m selling here at the right time, hopefully. I have certainly been watching the valuations.”
The number of pending sales in June soared 10.4 percent from a year ago, to 1,128 from 1,022, according to new data from BNAR. That’s the second-straight year-over-year gain – after 5.2 percent in May – and the highest-level for June since the peak of the market in 2007. It’s also the second-highest level for June – one of the biggest months of the year for home sales locally – in at least 14 years.
And, at that pace, the region is on track to set a new record for pending sales for the entire year, with more than 11,000. Indeed, Hunt’s pending sales rose by more than 12 percent in July, and the firm expects “an even greater increase” for August, said Peter Scarcello, general manager for the Buffalo Niagara region.
Also, homeowners are restocking the market’s inventory for future months, putting 1,965 new listings up for sale in June. That’s 15.9 percent higher than total new listings from June 2013, and marks the second-highest level of new listings for June in at least 15 years. Only June 2006 was higher, at 2,002.
“Sellers are finally entering the market after a long winter and more confidence builds in the economy as a whole,” said David Weitzel, a broker with Re/Max in Amherst.
At that rate, total new listings for the year would reach 18,290, behind only the boom years of 2006 and 2007.
“We are seeing more inventory hit the market right now as sellers have been seeing and reading about the heated market. So now we have more inventory, and sellers are also trying to push things even farther – which will really test buyers and the market,” said Jean-Michel Reed, a broker at Gurney Becker & Bourne. “Our market could use a little more balance and these oscillating numbers reflect the market trying to find a healthy balance, both in terms of volume and value.”
Nationally, research firm and data provider CoreLogic reported that U.S. home prices rose in June by 7.5 percent from a year earlier – the smallest year-over-year growth in 20 months. Prices had risen 8.3 percent in May, and 11.9 percent in February, the peak. Overall, prices rose in 98 of the 100 largest cities tracked by CoreLogic from a year earlier.
BNAR’s data reflects arms-length sales through brokers who are members of the trade group in the eight-county area of Western New York, plus a handful of deals in Monroe and Livingston counties.
“Regionally, we are experiencing tremendous consumer strength in purchasing homes,” said BNAR CEO John Leonardi. “More inventory definitely helps. What occurs is sellers who may have wanted to sell their homes previously but couldn’t find their next home stayed put, but now with more inventory, those same sellers have options. In turn, new buyers are taking advantage of the added listings. It is a win-win.”
The monthly report has not-so-rosy figures, too. Closed sales fell 6.3 percent to 948. And the total inventory of homes for sale still fell 7.3 percent to 5,168 – the lowest since 2005 – even with the surge in new listings. At that rate, the supply would last just 5.9 months, down 10.6 percent from a year ago.
Also, prices fell, with the median down 1.9 percent to $127,500 and the average falling 5.6 percent to $149,496. “I’m surprised to see a drop in prices, as the limited inventory has been pushing up prices in the city and suburbs,” Weitzel said. “There is still a severe shortage of housing in specific segments. The city as a whole has a shortage at every level, and I’m seeing a shortage of reasonably priced homes for first-time homebuyers.”
But closings reflect deals signed at least two months earlier – during a wet and chilly April that followed a long, bitter winter. Fewer homes were for sale, fewer buyers were out looking, and competition on prices wasn’t as fierce.
Also, “last year was a huge year, the biggest in seven years,” since before the recession, noted Philip L. Aquila Jr., general manager of residential real estate for M.J. Peterson Corp. That makes comparisons with the current year more difficult, especially with the “rotten winter,” so closed sales have been down for six straight months. “That’s what we’re up against,” he said.
By contrast, pending sales look forward one or two months and new listings demonstrate the strength of the stock that’s on the block.
“I’m hoping that this is the beginning of a good, strong, mid-summer-into-fall pattern of sales,” Aquila said.
There may still be some slowdown for part of the summer, as families take vacations while their children are out of school. But brokers expect it to pick up again later in the summer and continue through October. “We normally see an uptick for the second biggest-selling season in the Western New York area in August,” said Bret Llewellyn, a broker at RealtyUSA and manager of the firm’s Metropolitan Office. “We expect more listings in the next month or so and expect the sellers’ market to continue well into 2015.”