The Buffalo Niagara housing market isn’t showing any signs of loosening up.
Home prices are rising at a moderate pace. Home sales are strong, but still below last year’s pace as rising prices cut into affordability and record low listings limit the choices buyers have, according to new data from the Buffalo Niagara Association of Realtors.
Overall, it’s a housing market that still is squarely tilted in favor of sellers, with only enough homes on the market to absorb 2.4 months worth of sales at the current pace. A housing market is generally considered to be in balance between buyers and sellers when there is a six-month supply of homes for sale.
“While it remains true that sales prices are running higher and that inventory options are relatively low, buyers are beginning to find wiggle room at some price points and geographies,” the local real estate group said in its monthly report.
Solid demand and a limited supply is a prescription for higher prices, and that’s exactly what’s happening in the Buffalo Niagara housing market.
To be sure, home prices aren’t rising as fast as they were during the late spring last year, but they’re still rising at the second-fastest pace in the last 20 years. With the number of homes for sale at a more than 20-year low, the median price of the homes that sold during May rose 6.8% to $156,000. That’s a record high for May.
With buyers scrambling for a small supply of homes and grappling with steadily rising prices, the pace of home sales has been slowing for 19 straight months.
Home sales have slowed by 2.9% during the last 12 months, on an annualized basis, after dropping by 3.7% during the year before, based on revised data from the real estate trade group. As a result, sales have cooled to their slowest pace in three years, but activity remains comfortably above the pace from most of the last two decades.
The number of homes for sale fell by 4% last month – extending an eight-year decline in inventory that has left buyers with far fewer choices than they had just a few years ago.
The decline continued into May, leaving new listings down 1% through the first five months of this year. Over the last five years, the number of homes that are coming up for sale each month has been cut in half.
Homes still are selling briskly in a market with low inventory and mortgage rates still relatively low. The average home that sold during May was on the market for 46 days, one day less than last May, but 15 days faster than 2016. Home sellers also are able to hold fairly firm to their asking price.
The average home that sold last month went for 98.4% of its most recent asking price.