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How is Buffalo’s House Market Performing?

Home values in Buffalo have been appreciating greatly over the last few years. According to HSH.com’s home price recovery index*, Buffalo is one of 10 metro areas in the U.S. where home values have recovered the most. One might say that Buffalo never hit the boom when other cities such as Boston and Chicago were climbing, but at the same time, the city’s home values have been performing quite well as of late.

In the second quarter of 2017, home prices in the Buffalo metro are now 32.83 percent above their mid-2000s “boom-era” values, ranking No.9 out of a list of the 100 largest metropolitan areas.

To see where the Buffalo area ranks in terms of home price recovery, see the full list of 100 metro areas here.

*HSH.com’s “Home price recovery index” uses the Federal Housing Finance Agency’s (FHFA) Home Price Index as a basis to determine which housing markets have fully recovered (or more) and which still lag behind the housing recovery. Readers interested in seeing how market gyrations have affected their home’s value while they’ve owned it should plug their numbers into HSH.com‘s “Home Value Estimator” to track gains or losses over that time.

Written by Buffalo Rising

Buffalo Rising

Sometimes the authors at Buffalo Rising work on collaborative efforts in order to cover various events and stories. These posts can not be attributed to one single author, as it is a combined effort. Often times a formation of a post gets started by one writer and passed along to one or more writers before completion. At times there are author attributions at the end of one of these posts. Other times, “Buffalo Rising” is simply offered up as the creator of the article. In either case, the writing is original to Buffalo Rising.

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  • Matthew Ricchiazzi

  • mightyNiagara

    rediculous.
    cant buy homes in places where you want to buy homes cause people don’t have enough cash for those low listed homes or they’re waaaaaay to expensively listed.

    and the homes that are affordable by people who don’t have the money to purchase where they want are in places that people do not necessarily want to live, in part because there’s no attention to those areas for redevelopment

    • Matt Gracie

      Your point is that it’s more expensive to buy a house in more desirable neighborhoods? I think that’s a pretty universal rule.

    • distas

      Supply and demand, its a good thing.

    • Josh Robinson

      It’s an overall good thing for the city in that it’s forcing younger buyers to look beyond Elmwood, Hertel, and Allentown and into areas like Black Rock, South Buffalo, Kenmore, Tonawanda etc. Which is in turn causing home values to rise in those areas and an increase in redevelopment (Termini’s Grote St. projects and Schneider’s Seneca St. project being the prime examples). Areas that you might consider undesirable now may not be so in a decade or two. Investment can only spread once the desirable neighborhoods become too expensive for the average family to buy in.

      • Matthew Ricchiazzi

        The Brown Administration is inappropriately beholden to real estate interests that fund his campaign account. The administration took nearly a decade to pass the ‘Green Code’ zoning modernization (which should be seen as a massive profit engine for the real estate, but in a city as ignorant as ours we will continue to allow variances to high paying campaign contributors, thereby undermining the objectives of the entire Code). The massive document not once uses the word equity — mind you dozens of various planning documents which made some limited efforts at inclusionary zoning were voided by the passage of the Green Code, as I understand it.

        The City is in need of sweeping reforms in the area of housing policy and affordability. Some sort of inclusionary development policy must be established to go beyond the Green Code’s limitations.

        I prefer it to come in the form of a citywide policy requiring community benefit agreements on all private development projects greater than, perhaps, $20 million in construction value, to allocate between 3% and 5% of the facevalue of a project towards community benefits, broadly defined, and to be negotiated with bonafide residents in the projects’ immediate vicinity.

        Such a policy regime would mitigate displacement associated with gentrification, and would more broadly share the benefits of the region’s subsidy-intensive economic development programs.

        I know others are pushing for required set asides of affordable units on all private development projects; or some form of rent control.

        • Healthnut

          “Such a policy regime would mitigate displacement associated with gentrification, and would more broadly share the benefits of the region’s subsidy-intensive economic development programs.”

          Study showing number of people being displaced in Buffalo because of gentrification?

        • Johnny Pizza

          Nope nope and nope. Those are the worst ideas I’ve ever heard proposed by you. Considering you once stated that we should harness tidal energy from Lake Erie (despite lakes not having tides), that is really saying something. Thankfully BJG has no chance of becoming mayor because those proposals are absolutely horrendous and would be a stake in the heart for Buffalo residential development (you know the kind of development we’re trying to move forwards).

      • benfranklin

        When this is called ‘trickle down’ economics, people don’t like it as much. Glad to know you’re on board.

        • Josh Robinson

          You misunderstand. I’m not saying there shouldn’t be protections in place so that senior citizens in the Fruit Belt aren’t priced out of their homes by rising property taxes. And I’m not saying that new apartment developments shouldn’t be mixed-income to keep neighborhoods accessible and avoid concentrated poverty.

          What I AM saying is that people who aren’t economically disadvantaged – I’m talking about young professionals looking to start a family – having to look outside of the most “desirable” neighborhoods to buy a home can only be a net positive for the city. The neighborhoods I mentioned above will only survive if young families keep moving in.

          Everyone wants to live in Allentown, The EV, or Hertel. But not everyone will be able to due to increased competition and rising property values, prompting many to consider the less desirable (but still stable) areas like Blackrock, Riverside, and South Buffalo. That’s a good thing for the city as a whole.

  • Louis Tully

    There’s a vacant lot on my street listed for $230k. Nutso.

    • Tim H

      In the city? Do you mind sharing the address of the lot?

  • Johnny Pizza

    I believe the market is starting to top out. Lots of listings where prices have been cut. That should bode well for less pricey areas which we will the affordable locations for buyers still seeking to live in the city.

    • Josh Robinson

      Market always slows in the fall months, though. We are nearing the top but I don’t think we’ll get there until inventory improves or interest rates rise.

      • Johnny Pizza

        The homes I’m referring to were on for 6 months already. They’re just overpriced.

  • Sabres00

    After years of watching HGTV people are finally listing their houses using Zillow numbers but are finding out the market isn’t as strong as they thought. Sure some areas are finally self correcting, but still a ton of homes on the market that aren’t going anywhere.

    • grovercleveland

      I guess it depends where you look I guess. A friend of mine put offers in on 6 houses, all well over (25K plus) over asking and was outbid on 5 of the 6.

      • Sabres00

        I can see that in some areas, but banks are only going to give you a mortgage for so much. I know a bunch of people who ended up losing out to higher bids only to have the owners come back a few months later when the buyers couldn’t get the numbers to “work”. This happened to 4 people I know in the last year.

        • Josh Robinson

          You’re both right. I lost several bids where I bid 10-15k over asking and the winning bid was much higher. The same happened on the house I’m currently closing on, but the bidders who went higher got cold feet at the inspection. Which is probably for the best, as it only appraised a few thousand more than my bid. Their sky high offer would have never appraised with the bank.

          • Matthew Moje

            Good Luck with the house Josh!

          • Josh Robinson

            Thanks, Matt!

          • Johnny Pizza

            Appraisals are not so definitive. Appraisers realize that if they keep handing in appraisals that don’t support values and kill deals, that they won’t be selected for future deals. There is an unfortunate conflict of interest for all involved in real estate finance to basically keep everything moving forward, because after all that’s how they are all paid.

            I’d bet you $1,000 that if the other buyers had continued moving forward with the purchase, the appraiser would have appraised it for what was needed to support the loan.

          • nuvaux

            They just shoot the next sucker in the foot, by sticking their $150K mistake on him for $195K, then he’ll stick it on the next sucker for $225K – until the bubble bursts & nobody will touch it for what it was “worth” 10 years ago … it’s a never-ending saga. Simple inflation is reasonable, but when a $30K house is “worth” $60K then $120K then $240K within a few years -without major renovations – something is not Kosher. The real mystery is why banks even bother to give mortgages @ the absurdly low rates of today; a conservative stock-indexed fund pays at least twice as much. If mortgages were 8% -10%, some reality would be injected into the situation.

            ps – Actually, it’s the established neighbors who are forced to “cough up” when bubble sales allow the City to claim a property is suddenly “worth” a huge assessment increase. In the last few years, 3 of my immediate, elderly neighbors were forced to sell when their assessments were tripled, beyond their capacity to pay the taxes. When people cannot afford to live in their own homes because of house-flippers and speculators, something is tragically unfair and wrong. It’s even difficult for landlords, when they want to be loyal to long-time tenants but rents will no longer cover increased taxes. So far, that has not been my fate – but it’s coming, and when I am forced to increase rents from my admittedly naive $450-$650 rates for a typical West Side flat, 17 families are going to be very sad.

      • Matt Gracie

        Every house on my street that’s been listed in the last year has sold in two weeks or less. The market in my neighborhood is nuts.

  • nuvaux

    Real estate “values” are far more emotional than sensible. Most “bubbles” AND “busts” are fueled by lemming-like, follow-the-leader, every-man-for-himself madness. Value is 100% Subjective, which the banks forget now and then, when they lend $10 against a $2 property – thus the awful record of failed banks.