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Year After Low, Home Sales 'Fabulous'

By Jonathan D. Epstein

NEWS BUSINESS REPORTER

October 5, 2011

Home sales in Western New York soared by 45 percent in August from a record summertime low a year ago, and home prices stayed near record levels, despite dropping a bit from July.

According to new figures from the Buffalo Niagara Association of Realtors, 925 homes changed hands during the month, a big jump from just 639 in August 2010. It’s also 9 percent higher than July’s 848.

But last year’s level was the lowest for any summer month in at least a decade, coming two months after the federal tax credit ended for homebuyers.

“We had a fabulous closing month in August versus a year ago, but that’s an aberration. This is all tax credit stuff,” said Philip L. Aquila Jr., president of the region’s multiple-listing service run by the Realtors’ group.

Aquila, who is also general manager of MJ Peterson Corp.’s residential brokerage offices, attributed the month’s strong performance to skewed home-buying activity.

He noted that last year’s results for the second half of the year were unusually low because so many homebuyers rushed to close deals earlier in the year to qualify for the tax credit. This meant

that sales for the first six months were artificially high, with little steam left for the rest of the year, making for an easy comparison with 2011.

But the market is still languishing when compared with earlier boom years, even just two years ago. Indeed, total sales for the year to date, 5,529, are down by 13 percent from the same period in both last year and 2009, and much more so from 2008.

“We’re running behind, and that’s the economy,” Aquila said. “That’s where we’re at in the country. That’s all the problems we have that we have to deal with. I’m hoping that gets a little better, but that’s subject to a lot of things.”

Similarly, pending sales — where an agreement has been signed but the deal isn’t final — were off by 2 percent in August, to 784, from 799 a year ago and 800 in July. Moreover, they’re down by 9.7 percent for the year to date — to 6,320, from 6,997 a year ago — and they’re down by 17 percent from 2009.

“I don’t think we’ll catch 2009 in the pending,” Aquila said. “Maybe we’ll have a better fall. I’m a positive person, but you have to make up 17 percent in four months.

“It has not been a fabulous year, but the rest of the country is talking 25 percent to 35 percent down, so we’re doing way better.”

Meanwhile, prices remain near historic peaks, although they’ve dropped slightly from a month earlier, indicating that local real estate values and appreciation are holding their own despite the national economy.

The average price fell by 4 percent from a year ago and by 6 percent from July, to $138,648, while the median price rose by 2 percent from a year ago, to $120,800, but was down by 3 percent, from $125,000 in July. That’s still the eighth-highest average and fourth-highest median price since at least 2000.

And that’s something local real estate agents are quick to seize on, especially with interest rates at 60-year lows.

“Buffalo is the best spot to be in for housing right now,” Aquila said. “It’s a good time to buy, if you have a job and you’re secure at your job.”

But, he cautioned, “the rates are not enough to overcome the lack of jobs, the unemployment and the security, which is the psychological part of this,” he said. “People are nervous. They need to calm down.”

New listings rose by 8 percent in August, to 1,680, driving the total inventory of available homes up by 4 percent, to 6,587.

jepstein@buffnews.com