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Summer home sale prices hit record

Jason Zornek has almost lost count of the number of times he and his wife, Adrienne, have been outbid in their year-long quest to find their first home.

Crowded open houses, competing bids, all-cash offers, waived inspections and contingency-free deals are just some of what they've come up against. That's not what the couple bargained for when they decided to start looking for a starter home so they could get out of their two-bedroom apartment in Lancaster.

"We thought it would be like the commercials on TV, with 500 options and everyone trying to throw their house at you," said Zornek, a 37-year-old technician. "That's totally not what it was."

When they finally got their house – a 1,400-square-foot, three-bedroom home on Harlem Road in Amherst – they paid $18,000 more than the $149,999 asking price and only won by a couple thousand dollars, he said.

They're not alone. Home sale prices in Western New York hit new peaks over the summer, as the region's housing market continued to churn past historic records.

The median sale price hit record highs in August and September, as high demand for homes continued to outstrip supply.

The median sale price rose 11 percent in August from the same month a year earlier, hitting $150,000 for what appears to be the first time, according to Buffalo Niagara Association of Realtors statistics. It dropped slightly in September, to $147,500, but that was still 9.3 percent higher than September 2016.

The monthly median home sale prices for the region have increased each of the last six months compared to the same months a year ago.

"It is a seller’s market," said John Leonardi, the trade group's CEO. "It’ll remain that way going into the first quarter of 2018."

The surge in prices came as the number of closed sales continued to drop compared to a year ago. Continued low interest rates and strong interest in certain neighborhoods of Buffalo and its suburbs have driven heavy activity. Brokers for months have reported rampant competition for homes and buyers who haven't been able to find enough homes to meet their desires.

That was the case for the Zorneks, who closed on their house on Sept. 22, but are still not in it. They had to agree to give the sellers another 60 days to vacate.

"We were at the point where we were going to start looking at empty lots and building new rather than trying to buy one," Zornek said. "This is the most we can possibly spend, and we're willing to spend this on this house, so it's take it or leave it."

Chris Corica, founder and president of Queen City Funding, a mortgage brokerage, described an "overflow of buyers" who have driven demand and a steady supply of new mortgage applications.

"Just when you think this market may slow down, it kicks back up," Corica said. "I don't see a slowdown in sight."

The number of closed home sales reported by the Buffalo Niagara Association of Realtors in August fell 10.8 percent from an all-time high of 1,414 in August 2016. Closed sales also plunged 18.2 percent from September 2016 to September 2017. Some of that drop could have been driven by a change in the way the association reports monthly sales figures. BNAR recently switched to reporting the prior month's sales within 10 days of the month's end, instead of waiting 40 days, giving Realtors less time to submit their final figures.

While prices have increased, there are fewer homes going on the market and less inventory available.

Homeowners added 1,629 homes to the market in August, which was down 3 percent from the same month a year before. They added 1,368 in September, down 9 percent from September 2016.

"The overall market continues to be very robust with a continued lack of inventory at almost every price point this year and new buyers entering the marketplace," M.J. Peterson real estate agent Susan Lenahan.

And not all of the homes are in good shape or properly priced. That was the  Zorneks' experience, too. "A year ago, we had a lot of options, but you keep looking at the homes and the sellers were trying to hide faulty foundations and things like that," Jason Zornek said. "Then, in the last four or five months, the problem was just not enough availability."

The average price reached $177,266 in August – the first time it has ever surpassed $175,000, BNAR statistics show. That's also a doubling since late 1999.

And while it fell slightly in September, to $174,360, that's still up 6.8 percent from a year ago. It's also the highest for September and the second-highest on record, after August.

"Good for Buffalo," said Louis Vinci, an agent at Howard Hanna Real Estate Services. "It's about time Buffalo got some respect."

BNAR reports transactions involving its member Realtors in the eight-county region of Western New York, as well as some of its members' sales in Monroe and Livingston counties.

"This is good for the area overall. Our economy is strong, with plenty of strong buyers willing to pay for the right home in that median price point," said Greg Straus, broker at 716 Realty in Tonawanda. "I am as busy now as I have been all year."

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