Tuesday, January 16, 2018

Erie and Niagara Counties Reached Record Price Peaks in 2017

Buffalo Homes Sell in Just 31 Days

Single family home prices in the Greater Buffalo Niagara market ended the year at all-time highs as strong demand, coupled with critical shortages of homes for sale, drove up prices in Erie and Niagara counties. Average annual prices rose 4.3 percent in Niagara County, 8.6 percent in Erie County and 15.5 percent in Buffalo, increasing homeowners’ equity but also making it increasingly difficult for first time buyers to find affordable homes.

Shortages of homes for sale drove rising prices as demand put pressure on supplies. Both counties ended the year with inventories 40 to 50 percent lower than they were three years ago.  In December, supplies were down 14.5 percent in Erie County and 19 percent in Niagara County compared to the same time last year. In Buffalo, where rising prices motivated more owners to sell, active listings at year’s end were only 6.4 percent below December 2016.

Demand coupled with smaller supplies also reduced selling time, and by December, homes were selling faster in both counties than they have in at least 12 years. In the fourth quarter, homes were selling in only 31 days in Buffalo, four days faster than Erie County as a whole and 14 days faster than Niagara County.

Sales across the region were uneven in 2017. Closed sales in Erie County fell by 2.3 percent and increased 1.6 percent in Niagara County. Demand was stronger in Buffalo, where sales rose 4.1 percent.

New listings trailed 2016
New listings in both counties trailed last year’s levels and failed to replace sales during the year.  Erie County ended December with 14.5 percent fewer listings than last year. New listings in the county trailed the number of listings in 2016 by 2.9 percent. Niagara County had 380 active listings, 19 percent fewer than last year. In Buffalo, new listings increased 2.67 percent over 2016.

By the end of the year, supplies in both counties were so low they could fulfill only slightly more than two months of demand. The months of supply fell to 2.2 months in Erie County, down from 2.8 months at the end of the fourth quarter in 2016. Buffalo ended the year with 204 listings, 6.4 percent fewer than last year. New listings in the city increased by an average of 2.6 percent as sellers responded to rising prices. By the end the year, the city had 2.1 months of supply.

Slower fourth-quarter sales afforded no relief.
Even as colder weather and the holidays slowed home sales in the fourth quarter, inventories declined even faster. Active listings fell by nearly 25 percent in Erie and Niagara counties, and new listings slowed even more during the quarter. In Buffalo, listings dropped by 15.3 percent in the final four months of the year. 

Erie County single-family home prices reached a multi-year high in 2017

Erie County prices reached all-time highs.
In 2017, the average sale price of homes in Erie County reached a record high of $152,000, 8.6 percent higher than in 2016. Monthly prices in Erie County also set a new record in June and August, rising to $162,000. 

Average prices in Niagara County in 2017 rose to $120,000, 4.3 percent higher than the average last year and a record high for the county. In June, monthly prices in the county reached $145,000. By the end of the fourth quarter, however, prices fell to $111,250, 8.1 percent below December 2016.

Closed sales in Erie County were down 2.1 percent and by the end of the fourth quarter, monthly sales were 9.2 percent below December 2016. In Niagara County, sales rose slightly to 1.3 percent, but by the end of the fourth quarter, monthly sales fell to 8.5 percent compared to last year.

Limited supplies made it easier to sell homes in the region during 2017; the time it took to sell homes in Erie County fell by an average of 25.5 percent, from 47 to 35 days.  Time on the market in Niagara County declined 23.2 percent, from 60 to 45 days. Sellers in Erie County received 99 percent of their list price, up from 97.9 percent in 2016. In Niagara County, sellers got 97.3 percent of their asking price, up from 95.7 percent in 2016.

Supplies of condominiums and townhouses in Erie County were also tight, falling by 15.2 percent during the year. However, demand was much weaker for condos and townhouses than for single-family homes. Days on market increased from 42 to 52 days during the year and sellers received 95 percent of their asking prices. Sales fell by 9.9 percent for Erie County condos and townhouses.

Buffalo prices soared 12.9 percent in 2017.
In 2017, Buffalo saw stronger price and sale increases than Erie County as a whole. Home prices in the city rose by 15.5 percent in 2017, from $77,825 to $89,900, a new record for annual prices. Sales during the year rose a healthy 4.1 percent over 2016 despite a 6.4 percent decline in inventories. Strong demand cut the time it took to sell houses from 50 to 31 days, a drop of 38 percent. Sellers received 98.5 percent of their listing prices during the year, up from 96.7 percent in 2016.

Though Buffalo prices rose on an annual basis, in the fourth quarter sales slowed by 13.5 percent and prices also fell by 38.6 percent. New listings slowed by 3.2 percent and homes took longer to sell, from 20 days on market in October to 33 days in December. Inventories declined by 15.8 percent during the quarter.

Niagara County sales and prices rose modestly in 2017.
Markets in Niagara County were the most stable in the region. Prices rose 4.3 percent over the course of the year and sales rose 1.3 percent during the year in the fall months, despite a 22.4 percent decline in inventories. Homes sold 23.3 percent faster during the year.
In the fourth quarter, prices fell 7.8 percent on a 13.3 percent decline in sales. Homes took seven days longer to sell by the end of the year.
Niagara County Prices Ended 2017 with a Gain

About HUNT Real Estate Market Reports: The HUNT Market Report is a quarterly analysis of real estate trends in Western New York designed to help real estate consumers keep up with local market trends. Reports are based on HUNT Real Estate’s analysis of multiple listing service data.