Area home sale prices saw their fourth record-breaking month in a row as the average sale price of a single-family home in Erie and Niagara counties rose 7.6 percent.
The average sale price of the 830 homes sold last month was $103,319 - an all-time high for the month of October, according to the Buffalo Niagara Association of Realtors. The median sale price rose 7.0 percent to $86,700 - the highest price for the month of October since 1993.
The median price means that half the homes sold for more and half sold for less and is not affected as much by the sale of either exceptionally high- or low-priced homes as the average price.
Homes with four or more bedrooms saw an especially large increase in sales price.
The median price of these larger homes rose 18.2 percent from last October to $130,000. The average sale price rose 10.4 percent to $143,083.
Some of the increase in sale price is being driven by home buyers taking advantage of low interest rates to buy more expensive homes, said W. Michael Smith, president of Metro Ken-Ton Realty, which has four offices in the area.
"Because of the low interest rates people are deciding to sell their $150,000 house and move up to a $250,000 house," he said. "The people who have three bedrooms want to move up to four bedrooms."
The number of homes sold for between $100,000 and $200,000 increased 29.4 percent in October, compared with the same time last year, according to figures from the Buffalo Niagara Association of Realtors. And sales of homes costing more than $200,000 rose 32.8 percent.
At the same time, the number of homes sold under $100,000 fell 7.2 percent.
Also spuring sales might have been an increase in interest rates on 30-year fixed mortgages in October. Rates last month rose as high as 6.31 percent before falling to 5.94 percent, the lowest level since mortgage giant Freddie Mac began tracking these rates in 1971.
"The people that had been lookers turned into buyers recently because they were definitely nervous about the uptick in interest rates," Smith said.
The number of homes for sale in the Buffalo Niagara area remains low compared with past years. There are currently 4,556 homes on the market, compared with 5,100 at the same time last year and 7,039 in 1998. This is at least the 46th straight month that inventory levels have decreased from the same time the year before.
"I think we're back in the normal (inventory) range," Smith said. "All the bankers tell me the number of refinances has been huge and after you refinance, you don't put your home on the market. When interest rates get high enough that refinancing stops, people will sell and buy another home rather than refinance and we should see the inventory level off."