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WNY avoids bust in home sales; Nationwide drop is worst in 50 years

The homebuying season was a bust nationally, but Western New York has fared slightly better.

March through August are typically the peak buying months nationwide. But this time, Americans bought fewer new homes in that stretch than in any other six-month period since record-keeping began a half-century ago.

And sales of previously occupied homes didn't fare much better. They nearly matched 2009's total for the peak buying months, and that was the worst since 1997.

Combined, total sales this spring and summer were the weakest on record dating to 1963. The figures underscore how badly the housing market is faring and suggest that a recovery is years away.

Because the economy is barely growing and unemployment exceeds 9 percent, many people see a home purchase as too big a risk. Some worry about losing their jobs. Others can't afford the 20 percent down payment that most lenders now require.

Not even reduced home prices and the lowest mortgage rates in six decades are persuading would-be buyers to act. "The job engine has really sputtered out, and without jobs, Americans really can't purchase homes," said Celia Chen, a housing economist at Moody's Analytics.

In the Buffalo Niagara region, the situation is "better than the national average, but it's still spotty at times," said Angelo S. Natale, president of Natale Builders, an Amherst-based homebuilder that operates in Clarence, Amherst, Williamsville, Lancaster and Orchard Park.

"It's not as robust as we would like it at this point in time, but we've had a resurgence as of late in customer calls, in meetings, [and] I know our models have been visited," he said.

Natale said lower interest rates helped drive sales and noted that the Buffalo Niagara economy is not hurting as much as other regional economies. "I don't know if we've had the high unemployment rate and the high foreclosure rate that the rest of the company has to deal with," he said. "Most of our development has been in the suburban settings, and I don't think unemployment has affected us as much as city dwellers."

He added that his company has seen more success in "project-specific" developments with unique characteristics, such as "green" development," that "showed a tremendous amount of activity" and "moved our company in the past month."

"In this area, I think it's more of consumer confidence that drives the market up or down," he said.

Philip J. Nanula, president of Essex Homes of Western New York, agreed, saying the problem is more driven by what people read and hear than about actual troubles here. "Our biggest issue is public perception and buyer confidence," he said.

But that's changing. He said his company has seen customers come in recently, ready to proceed with a new home and confident of being able to sell their existing home. "We haven't seen that kind of turnaround until recently," he said.

But that's not the case around the country. Plunging stock prices and renewed recession fears have led many economists to push back expectations for a housing recovery.

Chen expects housing prices to hit bottom at the start of 2012. She doesn't expect sales and prices to recover until 2015 at the earliest. In hard-hit areas such as California and Florida, it could take decades.


News Business Reporter Jonathan D. Epstein contributed to this report.

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