The revised federal home buyer tax credits are having their desired effect, as pending home sales in February soared along with prices, even as the number of transactions completed during the month fell to its lowest level in at least a decade.
The Buffalo Niagara Association of Realtors on Monday said closed home sales fell 7 percent to 388 from 417 a year ago and were down similarly from 411 in January. That's the lowest level for any month of the year since at least 2000.
However, closed sales, while widely watched, generally reflect home buying activity from two months earlier, during a slow part of the season. That's also right after Congress extended its original $8,000 first-time home buyer credit until the end of April and expanded it to add a $6,500 credit for "move-up" buyers who have been in their home for at least five years.
Since then, those credits have brought out home buyers in droves to take advantage of the extra time and new benefits. As a result, pending sales, which show the level of buying more recently, leapt 38 percent to 783 from 567 a year ago and 565 in January. That's the highest February in three years and the largest monthly tally since last September.
"The city remains very, very active. We're swamped. We are really, really busy," said Susan Lenahan, broker associate and head of the city office for MJ Peterson Real Estate Corp. "People are out there. Our numbers are up."
Meanwhile, the median price rose 13 percent to $104,920 -- the highest February median in at least a decade -- from $92,516 a year earlier. That means half of the homes that closed sold for less, and half sold for more, and the increase indicates that many of the homes sold are higher-priced, likely for "move-up" buyers. The median was $110,000 in January.
"Given our average home price, a $6,500 credit has a good effect," said John Leonardi, the Buffalo Niagara Association of Realtors' CEO. "For our marketplace, the $8,000 and the $6,500 tax credit really are driving these numbers."
Even more, the average home price soared 16 percent to $127,369, although averages can be easily skewed by a few large sales. The total dollar volume of closed sales rose 8 percent to $49.4 million, from $45.7 million a year ago, though it was down 9.9 percent from $54.8 million in January.
"That's really great news. Overall, everything is up," Leonardi said.
New listings of homes in the multiple listing service rose 13 percent to 1,236 from 1,096 a year ago and 1,098 in January. However, total active listings rose 1 percent to 5,161 from 5,121 a year ago.
The Buffalo Niagara Association of Realtors has been struggling to overcome reporting glitches with its closed sales data in recent months since the local multiple listing service, Western New York Real Estate Information Services, merged with several other local counties and formed an alliance with the Rochester and Syracuse MLS systems. The goal was to provide a unified and streamlined MLS from Central New York to the Pennsylvania border.
However, Buffalo's system, where pending sales were automatically marked as closed after 60 days, operated differently than the MLS systems in Rochester and Syracuse, where real estate agents were accustomed to manually going into the computer system to convert their pending sales to closed. With the alliance, Buffalo agreed to adopt the manual method, but many agents locally didn't adapt.
That wreaked havoc with the Buffalo Niagara Association of Realtors' closed sales numbers, which officials said were artificially low, prompting the group to withhold releasing the data twice in recent months.
This month, though, officials began calling every broker who had a transaction pending for more than 60 days, prodding them to manually convert the sales if they had closed.
"These numbers are as accurate as they can be," Leonardi said. "It is what it is."