Buffalo area home buyers either stayed indoors or spent many days at the pool during the hot days of July, because they weren’t out buying as many homes or closing as many deals.
Home sales fell in July from a year ago. Prices flattened. And homes spent more time sitting on the shelf, as the region’s red-hot housing market took a month off to cool after lighting up the billboards in June.
“June was a crazy month,” said Dana David, a broker with RealtyUSA. “In July, I definitely slowed down a bit for a few weeks.”
Closed deals fell 9.1 percent that month, to 1,186, according to new data from the Buffalo Niagara Association of Realtors. While that is a significant drop, it’s still the second-highest July in 16 years. The record pace was set a year ago. And it’s the seventh-highest on record for any month since 2001.
Pending sales – a home that’s under contract but hasn’t yet closed – fell 5.1 percent to 1,198. But that also followed a high point for July a year ago, and it’s still the eighth-highest peak for any month since 2001.
To be sure, that’s not enough to put much of a dent in an otherwise strong year. Closed sales are up 24.1 percent for the first seven months, while pending transactions are still up 14 percent.
And the temperature of the activity didn’t drop by too much, as prices still hovered near all-time peaks. The median sales tag fell slightly, to $137,500. That’s down by 0.4 percent from last year’s record peak of $138,000, but it’s still the third-highest level for any month in 17 years.
The average price ticked up slightly, to $165,477 – representing the highest peak for July since at least 2001. Only one month in the last 17 years – this past June – set a higher average price, at $167,155.
But the drop in transactions was an aberration in an otherwise boom year, especially during what is usually one of the best months for home sales. Homes spent six more days on the market in July – 48 versus 42 a year earlier. That’s a 14.3 percent increase, and runs counter to the trend of homes flying off the shelves as soon as they’re listed.
Some of the slowdown is seasonal, as many people were on vacation or just out enjoying an extremely sunny and warm month. But Realtors say it’s also a reflection of a difficult market conditions that have dampened buyers’ enthusiasm, and started to turn them off from the hunt. Call it a “correction,” much like what occurs in the stock market when activity gets overheated.
“Many buyers got frustrated from the lack of inventory and heavy competition throughout the spring months,” David said, referring to multiple offers, high prices and rapid deal-making. “Now that fall is coming, I feel a surge of buyers coming back, and many listings are taking weeks versus days to sell. This is helping to balance our inventory a bit.”
Even for those who are still searching, the pickings are slim because of what Keller Williams agent Tammy Capozzi called an “extreme lack of inventory.”
“In my 30 years of experience, I have never seen such a drought,” she said. “The houses that are not selling are not priced aggressively, which is causing them to remain on the market for longer periods of time.”
Real estate brokers also continue to be puzzled by the lack of participation among sellers. New listings plummeted 19.8 percent to 1,624 for the month, as the inventory of all homes available for sale plunged 23.5 percent from a year ago, to 4,325. That’s the lowest level for the month of July since at least 2000.
At the current pace of sales, that’s only enough for 4.2 months, well below the six-month mark that is considered healthy for a housing market.
“We still need more inventory in specific markets,” David said.
BNAR reports arms-length transactions from its Realtor members in the eight-county area of Western New York, plus a handful of sales in Livingston and Monroe counties.