House hunters have their work cut out for them as the spring home buying season begins.
The number of homes for sale fell to a 22-year low during February, further tightening a housing market that already had buyers scrambling to find homes.
Listings are down by 12% from a year ago, making for intense competition for available homes, especially for well-kept properties in sought-after neighborhoods.
While the market tightened as the early stages of the coronavirus outbreak occurred, the housing market could be affected by the ripple effects it is causing. While mortgage rates have fallen to record lows – a positive for buyers – the stock market’s plunge has pared investment portfolios and raised recession fears, both potential negatives for buyers.
“It will be important to watch the spread of COVID-19 and its potential impacts to the overall economy in the coming months,” the Buffalo Niagara Association of Realtors said in its monthly report.
For now, homes for sale are in short supply, with inventory at its lowest level in more than 22 years. That's the biggest factor shaping the Buffalo Niagara housing market.
The number of homes for sale plunged by 12% in February to its lowest level since at least 1998 – extending a nine-year decline in inventory that has left buyers with about 40% fewer choices than they had just four years ago. The decline could be abating, however, with new listings rising by 6% last month.
Solid demand and a limited supply are steadily pushing up home prices. While the nearly 5% rise in prices over the past 12 months is the slowest increase in three years, that's still pretty good by local standards. Local home prices rose by as much as 5% only once between 2001 and 2017.
The median price of homes sold over the past year rose to $157,000, up more than $7,000 from a year ago and nearly $30,000 more than three years ago.
Home sales have been holding their own, despite the slim pickings for buyers, based on preliminary data from the real estate trade group. Sales are up 2.5% over the past 12 months, on an annualized basis.
With inventory down, the average home that sold last year went for only a little more than 2% less than its most recent asking price, a slightly smaller discount as a year ago.
Homes also aren’t lingering on the market, with inventory shrinking and low mortgage rates. The average home that sold in February was on the market for 51 days, one day less than a year ago, but nearly two weeks faster than February 2017. With only enough homes to absorb only two months’ worth of sales, sellers have a big advantage in negotiations with buyers.
Story topics: Covid-19