Thursday, April 19, 2018

Shortage of Homes for Sale Plague Erie and Niagara County

Conditions Create Strong Sellers' Market
The shortage of homes for sale that plagued the Greater Buffalo-Niagara market in 2017 increased during the first quarter of 2018. Rising home prices and growing demand, however, according to the first quarter market report from HUNT Real Estate ERA, are setting the stage for a strong sellers’ market for the opening of the spring sales season.
Late winter storms contributed to a decline in real estate sales as well as a year-over-year drop in new listings for the start of the quarter – potential buyers stayed home and the bad weather made it difficult for many homeowners to prepare their homes for sale. Warmer weather in the next couple of months may help drive demand and put upward pressure on prices, creating ideal conditions for sellers.
Buffalo’s inventories declined steeply in the first quarter of 2018 and are still declining, but at one-third the pace of the region as a whole. In contrast, prices rose by 27 percent in the first quarter and listings in Buffalo increased 37 percent compared to the fourth quarter of 2017.

Shortages Across the Region
Statistics show that nationwide inventories of homes in January and February fell 9.2 percent and 8.1 percent respectively compared to 2017. In the first quarter, inventories in Erie and Niagara Counties fell at a rate double that of national trends. Both regions ended the first few months of the year with fewer active listings than in nearly a decade.
In Erie County, first quarter inventories plunged 27 percent from the fourth quarter and are 18 percent below levels of a year ago. Compared to the first quarter of 2017, new listings in Erie County were seven percent lower and sales fell by 18 percent. Prices of homes rose less than two percent over the past year.
In Niagara County, inventories fell nearly 25 percent from the fourth quarter of last year and in the first quarter, homes sold in less than two months, nearly twice as fast as they did a year ago. In the first quarter, new listings were down 32 percent and active listings were down 31 percent compared to the first quarter of 2017. Similar to Erie County, prices in Niagara County rose only slightly during the first quarter.

Buffalo Home Prices Are Booming
Buffalo dramatically reduced its inventories last year. During the peak sales season last year, inventories were half the size of the same period compared to 2016. Prices rose 27 percent between the first quarter of 2017 and the first quarter of 2018 in response to tighter inventories, but demand remained strong. Sales rose 6 percent during the same period and sales volume rose from $51,744,436 in the first quarter of 2017 to $67,644,244 in 2018.  Homes in Buffalo are also selling 30 percent faster. Average sale price over the rolling 12 months was $136,443 and sales are averaging 218 per month.

Buffalo Active Listings
March 2016 to March 2018

Erie County’s Prices Set to Rise
Inventories in Erie County as a whole are falling faster than in Buffalo. Supplies of homes for sale are down 18 percent in contrast to this time last year, and new listings have declined seven percent over the same period. Tighter inventories are putting pressure on buyers as days on market have declined 18 percent over the past year. Average prices are up only 1.6 percent from the fourth quarter of last year and sales have risen only 4 percent from last year at this time.
Erie County’s sales volume by price was $326,651,294 in the first quarter of 2018 compared to $298,010,150 for the same period in 2017, an increase of less than one percent.

Erie County Active Listings
March 2016 to March 2018

Niagara County Prices are Still Flat
Average sales prices in Niagara County have increased only 1.19 percent since the first quarter of 2017 even though active listings declined 18 percent over that period. New listings are also falling behind 2017 by seven percent. Year over year sales are up 4 percent and homes in the county are selling at almost the same pace as in the first quarter of 2017.
Niagara County’s sales volume by price grew from $49,515,526 in the first quarter of 2017 to $54,630,267 in the first quarter of this year, an increase of 10.3 percent.

Niagara County Average Sales Prices
March 2015 to March 2018

“Homeowners in the Greater Buffalo-Niagara market who have been waiting for the right time to sell may never see a better market.  Over the past few years of the housing recovery, buyers have depleted inventories. As a result, prices are reaching new peaks. First-time and move-up buyers are motivated to buy before interest rates and prices climb even higher,” said Peter F. Hunt, Chairman & CEO of HUNT Real Estate Corp.