Larry Lamb, an East Side real estate investor, got into the business on the cheap – via the Buffalo and Erie County foreclosure auctions.
Since 1995, he has amassed 12 homes, some for as little as $1,500.
More than 2,100 Buffalo properties will be auctioned off this week, after their owners failed to pay city taxes, water bills or user fees.
But you won’t see Lamb with a bidder’s paddle at the annual three-day auction, which starts Tuesday in the Buffalo Niagara Convention Center.
“The prices have become outrageous, outrageous, outrageous,” he said. “I’ll be there just to see how high the bids will go, but I won’t be paying $20,000 for a house at the auction.”
A Buffalo News survey found that winning bids have skyrocketed by as much as tenfold in some city neighborhoods. In 2009, nine properties on Fillmore Avenue sold for an average price of $4,300. Four years later, the average spiked to $11,575 for eight properties on the same street.
From 2009 to 2011, winning bids for homes on Potomac Avenue on the city’s West Side ranged between $5,000 and $6,000. But in 2012, the average jumped to $17,000. Last year, it slid to $14,667, but still higher than a few years ago.
“I’ve been hearing that the prices are higher than before,” said Sam Magavern, co-executive director of the Partnership for the Public Good. “The housing market is heating up, and the higher prices at the auction could be an example of it.”
There are other reasons, too. The sudden increase could be due to the sale of more occupied houses, viewed as more valuable than vacant, boarded-up properties. The prospects of the expanding Buffalo Niagara Medical Campus could be driving up prices on the East Side, too.
And the influx of immigrants and refugees looking for affordable entree into home ownership has also contributed, along with developers and investors, big and small, locally based and from out of town, participating in the auction. In recent years, the auction has attracted standing room only crowds.
Whatever the reason for the dramatic spike in prices, Lamb believes the days of $1,500 houses are gone. The most he had ever paid for a house was $3,500. From 1995 to 2010, prices for East Side properties were $1,000 to $2,500, he recalls. In 2011, Lamb bought a house on Sears Street for $2,500.
“I got lucky. Nobody was paying attention,” he said. “It’s a small side street.”
That could be his last purchase because his “plate is full” with rental properties to manage, and “it doesn’t make sense to pay $20,000 for a house that’s really worth $10,000,” he said.
The auction list included 3,555 properties and vacant lots as of Friday, but that could go down as property owners settle with the city for outstanding taxes and fees.
Registration begins at 7:30 a.m. and the auction starts at 9:30 a.m. each day.