Before the bidding even began, a record was broken Tuesday at the city’s annual tax foreclosure auction in the Buffalo Niagara Convention Center.
More than 1,000 people turned out for the first day of the three-day sale, which usually attracts 400 to 500 people each day. Seating was set up for 1,200, and only a few empty chairs could be seen.
“This is the largest crowd I’ve ever seen,” said Michael A. Seaman, the city’s director of treasury and collections, who has been the auctioneer for the last 18 years. “I see a lot of the regulars, but there are also a lot of new faces in the crowd, and they have winning bids – which is great.”
Before lunchtime, a brick apartment building on Park Street had fetched $290,000 – the highest price for the day. A vacant lot downtown went for $18,000.
The record turnout and strong bids are indicative of the sizzling real estate market in Buffalo, city officials and real estate experts are saying.
“There’s a shortage of housing everywhere in the city, and with supply and demand, it’s causing the prices to go up,” said David D. Weitzel, a Buffalo homeowner and licensed associate real estate broker with RE/MAX North.
For example, a house he bought at auction years ago on Vermont Street, where he lives, sold for $310,000 – a record for the street, he said.
But the housing market is paradoxical, given that the city has a high rate of vacant homes. Weitzel said they are not livable, though, fueling the demand for the good homes.
Currently, the Multiple Listing Service has 387 homes on the market in Buffalo and 379 in Amherst, but for first-time homebuyers looking for prices from $100,000 to $200,000, there are only 39 homes in city and 132 in Amherst. While first-time homebuyers can’t afford the city, there is an upside, Weitzel said.
“People are getting better prices for their homes and equity in the homes, which has not happened in the city for decades,” he said.
Martin F. Kennedy, the city’s commissioner of assessment and taxation, said young families and the influx of immigrants and refugees to the city, eager for their first home, are turning to the auction, contributing to its popularity.
“People are realizing that Buffalo is a great city – it’s safe, affordable – and we’re ‘The City of Good Neighbors,’ ” Kennedy said.
The auction list has just under 2,000 properties from homeowners who failed to pay city taxes, water bills or user fees, along with vacant residential and commercial lots.
The convention center’s second floor was teeming with people who want to invest in the city by purchasing those homes and returning them to the tax rolls.
Tuesday’s sale was for properties and lots in some parts of downtown, the Lower West Side and East Side neighborhoods. The list is divided by tax districts, so properties in other neighborhoods will be auctioned Wednesday and Thursday.
Prospective bidders hailed from all over and all backgrounds – from Buffalo comedian Eddie Dobosiewicz to Md Hasan, a Bangladeshi immigrant from Brooklyn – with different intentions. Some wanted to add to their investment portfolios, while others, like Anthony Johnson, were searching for their first home. The 29-year-old Buffalo resident has attended a few auctions but has been outbid every time. “I’m going to get something this year,” he said.
Johnson and others said that winning bids have skyrocketed in recent years, shutting out a lot of small investors and individuals looking for a deal. Their observations are backed by a Buffalo News survey of final auction sale results from 2009 to 2014, which found dramatic price increases citywide.
The only properties that sold for the kind of “low prices” common a few years ago were deteriorated and recommended for demolition, and Seaman warned bidders of their status numerous times before and during the bidding.
But Hasan still bought one – a house on Shumway Street on the East Side – for $1,200. “I’m a contractor,” he said. “It’s no risk, no gain, so I’ll see what it’s like.”
Registration for the auction starts at 7:30 a.m. and bidding begins at 9:30 a.m. Wednesday and Thursday.