Comment 90345

By Noted (anonymous) | Posted July 22, 2013 at 07:12:26

Alexis Agnello has lived through a whirlwind. The 32-year-old commercial banker and her husband, a 33-year-old landscaper, bought a house in North Buffalo, sold their old house – and had a baby – all in three weeks.

The couple lived in half of a two-family home but were tired of being landlords. Two days after an open house, they had three offers. The house they bought – after just five days on the market – had six offers. They won the bidding war by offering nearly $28,000 more than the listing price.

Welcome to real estate these days in Buffalo, long considered a sleepy market immune to the booms and busts that roil the rest of the country. Thanks to a big drop in the number of homes for sale, coupled with a rush to get low interest rates before they are gone, Buffalo and Western New York are living a seller’s market not seen in years.

The result is a buying frenzy – and price increases that are distinctly un-Buffalo. Realtors talk about listings that drew half a dozen offers. The median sales price has risen each of the past 12 months and is up 6 percent just since January. Hunt Real Estate Corp. agent Robert Blake had a client offer $340,000 on a $315,000 home in the city – and still not get the house. Matthew Hamed and his fiancee, both pharmacists, found only about six homes in their price range in the city and not that many more in their preferred suburbs. Some bidders are paying all cash upfront, then refinancing with a mortgage after the deal closes. Others are forgoing inspections and other contingencies – or turning a blind eye to problems – just to get ahead.

“I personally have had some buyers who have really been through the wringer,” said Robyn Cannata, a real estate broker at Hunt in Williamsville. “I am representing some buyers who have put in four offers, on four separate houses, and had to deal with multiple offers each time.”

Said Susan Lenahan, head of the city office for M.J. Peterson Corp.: “It’s crazy. I’ve been in business for over 30 years. I’ve never seen a market like this.”

....

Kristin St. Mary and fiance David Barber liked a three-story, white-and-gray home for sale on Bird Avenue, west of Richmond Avenue. The kitchen had been upgraded. The bathrooms were updated. The owners had added a mudroom. The house was well-maintained.

The $169,900 asking price was less than others the newly engaged couple had looked at. “We’ve seen other houses that needed more work,” said St. Mary, 36, a local attorney and Syracuse native. “This house was great. It’s move-in ready.”

But although the house was listed only a day earlier, there was already one offer and another showing later in the evening. And the couple had lost out on another house after bidding $25,000 above asking price, only to be beat by a similar offer in cash. They eventually decided not to bid.

“People are snatching things up quickly,” St. Mary said. “There’s a lot of pressure.”

Unlike the “sand states” – California, Arizona, Nevada and Florida – Western New York never experienced the housing boom before the recession and didn’t suffer the bust, either. The sales volume is consistent, and builders are cautious. Prices appreciate here, but not by extreme rates or to extravagant levels.

Nevertheless, the current activity reflects some changes from recent years.

For one thing, interest rates, while they remain at low levels historically, have ticked up and are widely expected to rise further as the economy recovers. That provides an incentive for buyers to act now.

“I’m very encouraged by this set of circumstances, but it can’t last forever,” said Peter Hunt, CEO of Hunt Real Estate. “So if you don’t take advantage of it now, you may miss out.”

And buyers feel more confident. Economic and jobs reports are better, stock prices are rising, and steady home price growth around the country means people “aren’t worried they’ll lose their shirt if prices go down,” said Ken Fears, an economist with the National Association of Realtors.

“There were a lot of fence-sitters out there who were lacking the confidence to get back in the market, despite having low rates,” Fears said. “With the spectre of rising rates on the horizon, the fear of missing out has taken hold. Those who are on the fence have realized they have a small window here.”

On the other side of the supply-and-demand equation, homebuyers have faced a smaller and declining inventory of good homes on the market, as sales increased but new homes weren’t being added to the market fast enough to replenish it.

Nationally, the inventory in April was down 13.6 percent from a year earlier and the pace of sales means the current supply would run out in 5.2 months – well below the “neutral” pace of 6.5 months.

In Western New York, the pace of sales means the current supply of homes would run out in 5.8 months – down from 7.5 months a year ago. At its trough in December, the inventory locally was at its lowest point since March 2005.

“The market’s hot, the listings are down,” said Philip L. Aquila Jr., general manager of residential real estate for M.J. Peterson, and former president of the regional multiple listing service. “We’re back to where we were pre-recession.”



http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20130720/BUSINESS/130729878/1005

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