Area's housing market hottest in Northeast
Median sale price is up 4.8 percent
Forget the Buffalo Niagara region's reputation for cold winters. It's now the hottest housing market in the Northeast.
The median price of existing homes that sold in the Buffalo Niagara region rose by 4.8 percent, to a record high of $119,700, during the third quarter, according to a quarterly survey released Tuesday by the National Association of Realtors.
The price increase was the eighth-highest among the 153 metropolitan areas included in the survey and the highest in all of the Northeast.
The housing price growth locally stands out even more considering the painful slump that the residential real estate market is enduring nationally.
The average median sale price across the country tumbled by 11.2 percent during the third quarter, to $177,900, and now is $44,000, or 20 percent, below the median of just three years ago.
Prices dropped in eight out of 10 U.S. metro areas during the third quarter, as heavily discounted distressed sales made up 30 percent of all deals.
But because home prices in the Buffalo Niagara region never soared during the decade-long housing boom that ended in 2007, local housing prices have been insulated from the steep declines that have plagued higher-flying areas. The median sale price locally has increased by nearly $22,000, or 22 percent, since 2006.
Resale prices in the Buffalo Niagara region remain comparatively low, making homes here relatively affordable, which allows buyers to avoid putting excessive strain on their budgets to make the leap into homeownership.
The $119,700 median sale price of homes in the Buffalo Niagara region ranked 129th among the metro areas surveyed during the third quarter and was more than $58,000 below the national median.
The modest growth in the local housing market is in marked contrast to the weak conditions throughout most of the rest of the country, where home prices continue to erode.
"The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas," Lawrence Yun, the National Association of Realtors' chief economist, said in a statement. "But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market."
Prices in Fort Myers, Fla., plunged 40 percent from a year ago, to $98,000, the worst in the nation. Las Vegas saw its median price tumble almost 35 percent, to $138,500, year-over- year.
The largest price gain, by contrast, was in Cumberland, Md., where prices jumped 19 percent, to $122,100. Davenport, Iowa, followed with an increase of 14 percent, to $115,600.
The federal tax credit of up to $8,000 for first-time homebuyers helped boost sales in the third quarter. U.S. home sales grew in 45 states from the second quarter, with 28 states posting double-digit gains. Total quarterly sales hit a seasonally adjusted annual rate of 5.3 million, up more than 11 percent from 4.76 million in the second quarter.
President Obama signed a bill last week extending and expanding the federal tax credit. Now, buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010 and close by June 30.
The Associated Press contributed to this report.
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