Share this article

print logo

Real estate roller coaster; While Western New York hasn't seen the extremes in the housing market that other parts of the country have experienced, local buyers and sellers are finding they have to be flexible when trying to make a deal

Jenna and Craig Tyson are discovering what many Western New Yorkers already know: The local housing market didn't suffer like other areas, so buyers may have to act fast and be willing to pay.

Fresh from their January move here from northern Mississippi for Craig Tyson's new job as a D'Youville College professor, the couple has been looking at homes under $150,000 in Tonawanda and Amherst.

The parents of a second-grade girl and a 4-year-old boy are eager to get settled and out of their rental in Williamsville. But they didn't expect how hard it would be.

"It's been really stressful, especially the last two weeks," said Jenna Tyson, a 35-year-old native of Washington State who is doing most of the house-hunting. "Houses are coming on the market and I have to be right on top of it if I see it."

The local market started heating up in March, and many sellers, buyers and their real estate agents are sensing the same urgency for attractively priced homes.

"There is stiff competition for good, well-priced homes," said Mark Pagano, president and CEO of Nothnagle Realtors Property Centre, a franchise of Rochester-based Nothnagle Realtors.

Unlike many parts of the country, Western New York's housing market has remained mostly stable throughout the recession, defying trends elsewhere.

Sales and prices have dipped slightly since the middle of last year, and it remains far from a peak in mid-2010, but record low interest rates and pent-up demand appear to be stimulating spring sales.

Home sales in March rose 15 percent from a year ago to 656, and soared 37.5 percent from 477 in February. For the first quarter, sales were up 8.6 percent to 1,667, according to the latest figures from the Buffalo Niagara Association of Realtors.

Similarly, pending sales -- where an agreement has been signed but the deal isn't final -- rose 18.4 percent in March to 931, and 19.2 percent for the first three months of the year, to 2,356.

BNAR's numbers include only sales by its members in the eight-county Western New York region, as well as some sales in Livingston and Monroe counties. While that includes the vast majority of transactions, homes sold directly by owners are not included.

"This is the best normal quarter we've had since the financial crisis hit in '08, without any federal subsidies or tax credits," said Philip L. Aquila Jr., general manager of residential real estate for M.J. Peterson Corp., and former president of the region's multiple-listing service. "Buyers are out there, sellers are selling, and it's better than a year ago."

Home values are appreciating. The average price for sold homes rose 10 percent from a year ago to $138,536. The median rose 8.4 percent to $113,848.

"It's a very healthy market. It's affordable," said Miriam Treger, an associate real estate broker and manager of one of the offices for RealtyUSA.

Aquila's only concern about the market is whether higher gas prices will affect consumer spending and confidence.

The region has benefited from unusually warm weather during the winter, which brought out buyers and sellers earlier than normal.

The result has been a flurry of activity.

"There are bidding wars going on. People are paying over asking price," said Joe Sorrentino, an M.J. Peterson Corp. real estate agent who had 48 people look at a house two weeks ago, with eight offers for more than $400,000 each. One was a cash offer with $100,000 down.

"People are still bugging me," he said. "We still got people calling and wanting to know if they can outbid what we accepted."

John and Larissa Kowalczyk put their four-bedroom, three-bathroom Cape Cod home in the Town of Lockport on the market a few weeks ago, through RealtyUSA's Treger, for $193,000. That was about $10,000 above the "comparables" and $15,000 above other estimates of the home's value.

They soon received an offer for $185,000, but while they were considering it, other potential buyers came through, and one offered $190,000 and agreed to allow the Kowalczyks to stay in the home for a couple of months past closing. Since the parents of three young children are building a new home in Clarence's Waterford Village, that was important.

"I was surprised at how much interest we got and how quickly it moved," said Kowalczyk, 37. "We were pretty pleased."

>Not all rosy

Not all sales are so quick, and there are places where homes linger on the market and sellers are forced to cut prices.

"The market's really mixed, depending on price range and location," said Michael Olear, a real estate agent at M.J. Peterson Corp., who is working with the Tysons. "Some locations are extremely hot, some are slow."

As always, there have been disagreements between buyers and sellers that have hindered or even prevented sales in prior months.

"We have to educate both our sellers and our buyers and be clever and negotiate," said Rafael Toledo, an agent at Nothnagle. "It's almost like the buyers and sellers are fighting with each other. They're not willing to compromise. Otherwise, everything's a standstill."

For example, some buyers, particularly from out of town, have approached sellers with offers far below the asking price because they've read about the massive price declines elsewhere and assume that applies in Western New York.

"The out-of-town buyers sometimes think that they can drive a tougher bargain," said Susan Lenahan, a broker at M.J. Peterson's downtown office.

"All real estate is not national. It's local. These buyers are still reading a lot of negative press about various off markets, and [think] you should be able to offer 50 percent to 60 percent off the asking price. Well, you may still be able to do that in California, Florida, Nevada, Arizona or Michigan but not in Buffalo."

So the brokers try to educate them. Or they learn quickly on their own, Lenahan said.

"They might make offers on different places and then they realize that the sellers are getting closer to the asking price than they thought," Lenahan said.

"The sellers are frustrated right now," Toledo said. "They don't want to discount their homes anymore. They've worked very hard for them, especially the older couples. They're looking to cash in pretty good."

Some out-of-town buyers also expect major upgrades on homes here, as they could do in other major markets.

"It's not going to happen," Toledo said. "We don't have smaller homes that a seller is going to put [in] a $30,000 upgrade. Buffalo's not considered that type of market. When it has a fresh coast of paint, that's considered an upgrade."

Sellers are also sometimes unrealistic, brokers say, believing their home is worth more.

"Sometimes they need to be brought down to a more realistic outlook," Lenahan said. "After they've had it on the market for 90, 120 days, gee, the marketplace is then talking to you."

The Kowalczyks feared having the home on the market for a long time. "We've been looking at existing home listings for quite some time. We saw quite a few homes sit on the market for a while and go through price reductions," said Kowalczyk, who turned down a third offer as they were signing a contract with the second. "My nature is to prepare for the worst, and that's what I was preparing for."

Realtors said it's important to take time to clean and prepare a house for sale. Kowalczyk said they spent two months cleaning, de-cluttering and painting almost every room. They also "spruced up the outdoors" with edging, mulch and fresh paint.

"We didn't want to be on the market long or have to reduce the price so we did a lot of preparation and priced the house to get attention," he said.

>Staying flexible

Finally, Treger said she's noticed a lack of flexibility by sellers, who insist on terms that buyers find frustrating or hard to accept, such as closing dates or issues with a piece of furniture or other item in the house.

"I don't think it's the sellers that are disappointed. It's the buyers that are disappointed," she said. "The sellers are being very inflexible in a lot of the terms."

For the most part, however, Western New York sellers are getting pretty close to what they are seeking. In fact, Olear noted, homes in almost all area markets are selling for at least 95 percent of the list price. In the Town of Tonawanda, it's 97.5 percent for homes between $100,000 and $200,000.

And homes are selling quickly. Houses priced between $300,000 and $500,000 on the Upper West Side of Buffalo are selling within 38 days, while those in Tonawanda priced between $100,000 and $200,000 are on the market for 63 days. Overall in Erie County, homes priced between $100,000 and $200,000 are on the market for 76 days, and those priced between $200,000 and $300,000, 81 days.

"The fact still remains, if you price something correctly, to the current market conditions, it's going to sell," Lenahan said.

The Tysons, for example, put in offers on two houses. The first was verbally accepted after some back-and-forth negotiations, only to be trumped by a neighbor down the street who "offered a lot more money." The second had six showings on the day Jenna saw it, so they quickly made an offer but haven't heard back yet.

"We want one that's move-in ready. My husband is handy, but we just don't have time," she said. "So the stuff that we really want is going really fast."

email: jepstein@buffnews.com

***

ON THE RISE

According to the Buffalo Niagara Association of Realtors, home sales in Western New York are up 15 percent from last spring.

March 2011 - 570 Closed sales

March 2012 - 655 Closed sales