Home prices rose to all-time high levels in each of the last two months in the Buffalo Niagara region.
According to new data from the Buffalo Niagara Association of Realtors, the average price of a sold home in Western New York hit $171,833 in June and $173,720 in July. Both are new records for any month of the year, and mark the first time the average has exceeded $170,000.
The median price also rose 8 percent in each month, to $145,000 and $149,000, respectively. Those are the two highest levels on record for any month of the year, and also mark the first time the median has surpassed $140,000.
"The numbers look amazing," said BNAR CEO John Leonardi, calling it a "strong" sellers' market. "When a solid property is listed it'll be sold immediately and most likely with multiple offers...Sellers who sell today are knocking it out of the park."
An average can be skewed by a few outliers, but a median is the midway point of all transactions. That means that half the prices were higher and half were lower. The median for July is now almost twice the median for October 1999.
One key factor is that buyers have learned to offer more than they would have in the past and to expect a bidding war.
"A weak offer is not going to get accepted and with low inventory, many are not willing to take that risk," said Chris Corica, president of Queen City Funding, a mortgage broker. "They are coming strong from the start and that approach is reflected with this recent data."
That's what Amy Carrol of J. Lawrence Realty experienced. She listed a home in Clarence's Meadow Lakes neighborhood at $399,000 last month. An agent from another firm offered $350,000, and then raised it to $360,000 after Carrol's client declined. Two weeks later, Carrol had competing $400,000 offers, and the home is now under contract at $401,000.
This is the first time in years that BNAR, the trade group for real estate agents, has released monthly sales data so soon after the end of the month. The group reported statistics for June earlier this week, more than 38 days after the month ended. That's been typical, as the organization said it wanted to produce a more accurate picture, by giving agents more time to record their completed deals and new listings with the regional multiple-listing service.
Now, though, BNAR officials have decided to be more consistent with reporting by the national and state trade groups, which usually release data within days of the month ending. That provides more real-time insights into the market.
"With today's market, it is important that we report housing stats to our members, news outlets and others immediately," Leonardi said. "Our goal back then and now is to provide a valuable and true picture of western New York's housing market."
Officials cautioned, however, that it may also mean a greater likelihood that the initial data may be understated and then revised later, until agents get used to faster reporting.
Indeed, BNAR reported 900 closed transactions for June in its report earlier this week – a drop of 26.4 percent from a year earlier – but revised it to 1,162 for the same month just days later. That's now a decline of 4.9 percent for June.
Meanwhile, for July, the group cited 905 deals, down 27.7 percent from a year ago.
Homeowners added 1,755 houses to the inventory in June and 1,596 in July, down 9 percent and 1.7 percent, respectively, from a year earlier. As a result, total inventory of 3,282 homes at the end of July fell 29. 3 percent and remained at an 18-year low for the month – although that's up from the all-time low of 2,872 in April.
Leonardi of BNAR predicted that the overall housing inventory will remain low into next year, largely because homeowners are "staying put" as interest rates rise since they would have to pay higher rates on any mortgage for a new home. And he said the market needs more new middle-level homes built to free up the tight supply and allow homeowners to move up or down.
Houses for sale spend an average of just 33 days on the market, down from 48 a year ago. At the current pace of dealmaking, the supply of homes for sale would last just 3.2 months – well under the six-month measure of a healthy market.