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Home sales in region keep falling amid steady prices; 4-month slide leaves 1st half of year at lowest since 1996

Home sales in the Buffalo Niagara region tumbled again in June, largely because of artificially high sales a year ago from federal tax credits, but pending sales rose by 27 percent, and prices were relatively flat.

Closed transactions fell by 38 percent, to 861, from 1,379 in June 2010, although they were up by 30 percent from 660 in May, according to new figures from the Buffalo Niagara Association of Realtors.

It was the fourth straight month that home sales have slid to a 15-year low, leaving the total for the first half of this year at the lowest level since at least 1996.

Completed sales for the first six months of this year are down by 32 percent, to 3,691, from 4,889 last year, when the homebuyer tax credits inflated sales. But they're also down by 11 percent from 2009, which was the slowest first half for local home sales since 1996.

In better news, local home prices remained steady. The average closed-sales price rose by 1 percent from a year ago, to $140,095 -- an apparent record for June -- while the median price fell by 1 percent, to $118,000. So far this year, the average price is up by 2 percent, to $134,354, while the median is down by 1 percent, to $113,000, but the figures are up by 8 percent and 7 percent, respectively, since 2009.

"The appreciation is still holding. That's a good sign and a sign of not having huge foreclosures," said Philip L. Aquila Jr., president of Western New York Real Estate Information Services, the multiple-listing service operated by the Realtors association. "We're very stable. People are still making money when they're selling houses."

In another positive development, pending sales -- in which a contract has been signed but the deal isn't done -- rose 27 percent in June, to 872, but were relatively flat from 862 in May. Pending sales have held steady for the past three months.

However, they're still down 18 percent for the year to date, to 4,616, and they're down 14 percent below 2009 levels.

"We're in the right direction on the open sales. We're still way behind on the closed sales, but I think we've bottomed out," said Aquila, also general manager of residential real estate at MJ Peterson Corp. "The pending should stay relatively healthy for the rest of the year. We should start catching back."

Housing sales were bolstered in 2009 and 2010 by the federal first-time and move-up homebuyer tax credits that the Obama administration introduced right after it took office in early 2009. Those credits -- up to $8,000 for first-time buyers and up to $6,500 for move-up buyers -- were viewed as highly successful, but they expired last year. They also caused many would-be buyers to advance their purchase plans to take advantage of the tax credit, leaving a softer market in their wake.

As a result, year-over-year home-sales comparisons have been difficult for the last year. That should start to change after this month.

Still, Aquila was cautious on the national economy, noting that gasoline prices are "inching up again," and while the nation dodged a bullet with Congress authorizing a higher debt ceiling, the ratings agencies could still cut the country's credit rating, leading to higher interest rates for borrowers.

"Now we have to hold our breath. We need to light the fire on the economy and make people feel better," Aquila said. "Housing is still fighting to get back, but we're making headway. The last three years haven't been a good period for real estate."

Aquila said sales are also suffering from delays in closing loans, as banks "are getting much tougher and scrutinizing every detail." As a result, the process is stretching from 30 to 60 days in the past to 90 to 120 days now in some cases.

Additionally, on the front end of the market, "things are taking longer to sell" unless "it's priced to go," with the exception of "certain pockets" of Buffalo and Amherst that are still "hot" for homebuying, Aquila said.

As a result, the inventory of available properties picked up in June, with new listings rising by 9 percent, to 1,795, while active listings rose by 5 percent, to 6,604 -- the highest inventory on record for the region in the last decade. But new listings for the first six months of the year are down by 10 percent from a year ago and by 2 percent from 2009.


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