Anyone who has shopped for a house in Buffalo knows just how hard it is to find one these days.
Open houses are packed. Informal auctions with deadlines for offers are common. Bidding wars are becoming accepted by many would-be buyers.
And prices have soared – all because there simply aren't enough homes on the market to meet the demands and standards of buyers.
While Buffalo Niagara is far from alone in a shortage of homes for sale – it's a nationwide trend – the market is especially tight here, according to a new study by researchers at the National Association of Realtors.
The decline in available homes here was the fourth biggest among the nation's large metro areas during the past three years, the study found. The amount of housing here up for sale is only about half as much as three years ago.
"That’s insane when you think about it," said Dana M. David, an agent at Howard Hanna Real Estate Services. "We have had a drought of inventory for so long that it’s become commonplace."
According to the report, the amount of residential housing space up for sale has dropped by 2.8 million square feet over the past three years. That's a decline of 47.1 percent – nearly half the housing supply – since the same period of 2015.
The website's study looked at housing inventory levels during the first six months of each year.
The local decline also is the fourth-highest space loss among the nation's 50 largest metropolitan area, the report said. Buffalo was just ahead behind Indianapolis, at 49.6 percent; Charlotte, at 52.2 percent; and Sacramento, which has suffered the biggest drop, at 55.1 percent.
That's no surprise to Buffalo-area real estate agents, who are dealing with frustrated buyers every day. Many buyers have lost out on one house after another, or they've had to pay in excess of the asking price and their own budgets.
"The lack of inventory doesn't surprise me. It's what we've been seeing for the last five years," said Jerry Thompson II, broker-owner of Century 21 Gold Standard, which has offices in East Aurora and Amherst. "The level of the drop surprises me, but we've seen significant drops in inventory year after year after year."
In some popular communities, homes fly off the shelf almost as soon as they're listed, and many buyers are getting priced out of the most desirable neighborhoods, like the Elmwood Village, Allentown and the Delaware District in Buffalo.
"This may be more natural than we may think," said Peter Hunt, CEO of Hunt Real Estate Corp. "Buffalo has rarely seen more positive press nationally and internationally for more aspects of our community than we have experienced in the last few years, and we still enjoy relatively low prices and very livable, and in many cases walkable, neighborhoods. We are a desirable place to be right now. Most of our peer cities can claim nothing like this."
Part of the drop is because housing demand has been so strong, with more people staying in or returning to Buffalo, especially among the millennial population and so-called "boomerangs" who are coming back to raise families. Homes aren't lingering for sale for very long – just 32 days in September, compared to 46 days for the same month two years ago and nearly 70 days seven years ago, according to data from the Buffalo Niagara Association of Realtors.
"People are coming home. We're excited about Buffalo again," Thompson said. "We've got a good thing going here, so it's part of what we've seen."
"People love it here," said Hunt agent Stacy Phillips. "I have had numerous clients that have moved out of the area and then call me to return because they just love it here."
But it's also because many potential sellers just aren't putting their homes up for sale. Over the last 12 months, new listings have dropped 4 percent, BNAR reported Tuesday. So the supply isn't keeping up, even though home sales also have slowed in the tight market.
According to BNAR's new data, the inventory of homes for sale in the eight-county region dropped 4 percent in August, to 3,460 houses – barely enough to last for 3.4 months at the current sales pace.
"In some markets, houses are taking a little longer to sell, but the new listings aren’t coming in as frequently as we would hope," David, the Howard Hanna agent, said. "So while the average days on market is steadily increasing, the supply isn’t increasing any."
Buffalo is also by far the least expensive of the top 10 metro areas in the study, with a median list price of $190,000, according to Realtor.com. That means there may be even more pressure in Buffalo than in other markets, because the homes are more affordable than in many other U.S. markets.
The next cheapest is No. 5 Detroit, at $248,500, with an inventory decline of 46.4 percent. By contrast, Sacramento's median list price was $453,000, while No. 10 Seattle topped the pricing at $552,600 – nearly three times what a home costs in Buffalo, Realtor.com reported.
The median is even lower when factoring in the entire eight-county region, not just Erie and Niagara counties. According to BNAR data, the median sales price for all of Western New York in September rose 6.7 percent to $160,000. Meanwhile, the average price rose 4.1 percent to $186,446.
Thompson noted that this is the fifth straight year of "the strongest market" in history, but he expects conditions to change soon, with rising interest rates likely bringing more inventory to the table and slowing the pace of sales.
"I don't see it lasting. Nothing lasts forever, and markets go up and down," Thompson said. "It feels like the market is going to turn."
Already, he said, some homes "that would have flown off the market in April" are hanging around for longer. He also cited the increased home building activity, and the presence of "more flippers in the market than I've ever seen before."
"This has been a great market for builders all of a sudden," he said. "It's a long time since I've seen this many builders putting up spec houses in the market and selling them."
Indeed, Howard Hanna agent Vienna Haak said she's already seeing the change, as sellers overprice their homes because they think they're valued "through the roof," while buyers are no longer willing to overpay. "My experience since summer's end has been that while inventory is still low and we appear to remain in a strong sellers market, sales are coming to a halt," she said. "I feel the buyers' sense of urgency has changed, and they are now willing to wait for more properties to become available and at more affordable prices."
That's already showing up in the reported sales activity. According to the latest BNAR data, closed transactions fell 25 percent in September from a year ago, to 880 deals. And pending sales - those where a contract has been signed, indicating future closings - were down 6.1 percent, to 929.
Gurney Becker & Bourne agent Jean-Michel Reed agreed. "I think it is too soon to tell where we are going, but I think for sure our market is in a period of readjustment," he said.