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Inside WNY’s hot housing market

But is there truth to the hype that every single home transaction is a dramatic, cutthroat endeavor that results in big money for sellers? Not according to some of Western New York’s most seasoned real estate agents who specialize in the hot and up-and-coming areas.

“In Erie County, up to a certain price point – $250,000 – it’s super competitive, and that’s where first-time homebuyers are looking especially,” says Joe Saccone, a real estate agent with Keller Williams Realty who has been representing buyers and sellers since 2004. “The $250,000 to $450,000 range is active, but above that, it’s not the same.”

In East Aurora, the territory of Hunt Real Estate Agent and 30-year veteran Amy Mayfield, higher priced homes aren’t part of the madness, either.

“Up to about $300,000 are the ones that are popular,” she says. “In the $400,000 range and above, it’s slowing down. Here it’s mostly single family homes; there are very few doubles in East Aurora.”

Then there are the stories about homes receiving dozens of offers, punctuated by the lengths buyers go to in order to win the sellers’ favor. Mayfield recounts the couple that sent the seller a sonogram image of their baby-to-be, while others cite lavish gifts to sellers and their agents, unannounced visits to plead their case, and impassioned letters in which the buyers outline why they’re the perfect pick. Agents say that while fruit baskets and stalker behavior to get homes do happen, they aren’t the norm. The “love letters” to sellers, as they were known, were recently banned by the Department of State because of their potential to lead to discrimination (the young, white, straight couple being favored over other buyers, often with better offers, by older sellers with traditional ideas, for instance, happened often).

Matt Quagliano, a real estate agent with Keller Williams who has been representing sellers in North Buffalo for 28 years, says media hype is partially to blame for the assumption that all homes on the market become the center of an expensive bidding war.

“A lot of times what happens is that there’s one crazy story in a group of 20 transactions, and it’s human nature to capitalize on the dramatic,” Quagliano says. “If I look back at the last 15 houses I’ve sold, I didn’t see one fruit basket or bottle of Stoli coming my way. Yes, there is an intensity. The most I’ve had is 24 offers on one house — it was on Taunton, and it sold for $195,000 after the seller bought it in 1989 for $82,000. So there’s some truth to the urgency, but it’s not every house.”

Inside WNY's hot housing market | Buffalo MagazineSo which houses are causing the stir?

“The homes that are selling fast are the ones that are in the best condition and fairly priced,” says Joe Saccone. “That’s true everywhere. You can list a house that needs a lot of work and is overpriced, and even in a hot area, it still won’t sell.”

Seasoned agents are seeing a lot of those move-in condition homes on the market now, too. There are a few different theories as to why this has happened more over the last decade, ranging from the HGTV effect (shows hosted by DIY celebrities who inspire people to do their own upgrades, and other shows that feature first-time home buyers with unrealistic budgets insisting on shopping for perfection), to lower interest rates on home equity loans for improvement. Following the housing crisis in 2008, when many contractors were left holding their hats, the lack of new builds in desirable areas means homeowners have no choice but to fix what’s already built. And according to Quagliano, people just spend their money differently now than they did generations ago.

“The nuclear family has changed; it’s more common for people born in the 1980s to have one child or be childless, and two incomes mean more disposable income going into the houses. I started noticing this in late 1990s. I’ve seen some houses I’ve sold two, three, sometimes four times. In their early condition, the homeowner may have had five kids and sold the house with a lot of work needed. Then I saw people buy a $115,000 home and put same amount into it,” said Quagliano. “Now people are looking for move-in ready. None of that is instant; nothing exploded overnight.

The surge we’re seeing is a shortage of inventory — people are realizing the value of their homes and staying put. If they just put 10 years into fixing a house, they’re not about to do it again. This past July, I had two houses for sale on Richmond Avenue. That’s the lowest I’ve seen in 20 years; that street is usually flooded by then.”

In addition to a home’s condition and price, the proximity to entertainment and amenities is also a defining characteristic shared by popular areas like North Buffalo, East Aurora, the Elmwood Village and the West Side.

“The demand is up in areas of the city that have walkability, and options nearby for things to do after work and on the weekend,” says Saccone. “There’s a desire to return to that ability to walk places and interact with neighbors. This has been a trend around the country, and we’re at the tail end of it.”

Mayfield has observed the same thing in the Southtowns, where she’s seen interest shift from Orchard Park to East Aurora and back to Orchard Park.

“Orchard Park used to be more desirable — there were more subdivisions being built, and more options for homes,” says Mayfield. “Then Fisher Price started hiring about 25 years ago in East Aurora, and people started seeing how great it was, so they stayed, and then their kids came back. There are good schools, restaurants, and the feel that East Aurora has these little nooks and crannies. People are going back to walking and riding bikes. Everyone meets at the park, in the community, at the farmers market. Now everyone wants to live here, and there aren’t enough houses. And there are no new townhouses like they’re building in Orchard Park, where people who can’t buy in East Aurora are starting to look.”

That combination of low home inventory, high prices, and the desire to have food and fun within walking distance is what led to the resurgence of Buffalo’s West Side, says Rob Karp, a Keller Williams real estate agent and residential developer who specializes in the area. Sometimes the housing demand leads the way for businesses to follow, he says, and sometimes the commercial investment comes first.

“When the Elmwood Village started getting restrictive with businesses and charging astronomical rent, stores and restaurants moved to Hertel Avenue, and North Buffalo housing got hot,” says Karp. “When the hype was surrounding Elmwood and how cool it was, people flocked there. After a few years, people couldn’t afford to buy off Elmwood or in Allentown, so they went two blocks west. Then two turned to four, then six, then businesses followed. Now look at the West Side. Brooklyn blew up years ago when Manhattan got ridiculous; it’s how it works everywhere.”

Karp sees new areas of Buffalo where business is paving the way, with the potential of residential interest to follow. He says Seneca Street in South Buffalo, Larkinville, and Niagara Street – where there are localized flurries of new builds, adaptive re-use, and restoration led by established local business leaders – could be the next potential hot spots.

Mark Bookhagen, president of South Buffalo Realty Company and a native of the area, agrees that things are changing in the former industrial community. Established neighborhoods, houses people can still afford and things to do nearby are helping.

“There’s been a shift,” says Bookhagen. “Up until about 15 to 20 years ago, homes were passed down through generations; you see homes that have been in the same family for the entire life of the house. Homes are just now being sold outside of the family. People are coming from areas where they’ve gotten priced out of the market, like North Buffalo and the West Side. There are new small retail shops opening on Seneca Street and Abbott Road, and many of them are women-owned. Then there’s Canalside, Larkinville and Solar City close by – people who come here from elsewhere are drawn here because of those places. More young professionals are looking in South Buffalo because of the jobs down here and what’s nearby.”

Bookhagen says that in June 2005, the median home price in the Abbott Road/McKinley Parkway area was $55,000. In June 2018, the median price had risen to $119,000 for the same area.

“When you tell people how much their home is worth, especially if it’s been in the family for generations, their ears perk up,” he says.

So why is this all happening now? While there isn’t solid data to support all the theories surrounding why people want to live here, common reasons cited include an overall resurgence that became noticeable around 2012, and the national attention Buffalo’s food, architecture, rebirth, and fun have since garnered from national media like The New York Times, the Food Network,

Curbed, and countless others. There are millennial-driven trends around the return to urban living in the U.S. – with fewer cars in favor of walking/biking, less emphasis on ownership/material things and more on experiences, more frequent moves associated with more frequent job changes – that might be starting to apply here. Saccone says he’s even seeing more of Western New York’s huge 55+ population selling their suburban family homes and moving downtown, often competing with younger first-time buyers for the same affordable condos and homes in areas with things to do in their retirement.

Given the shortage of houses and the surplus of interest, buyers have had to get smarter about their expectations, both in terms of home features and how long it might take to buy a house. Agents are also seeing buyers willing to rent longer and wait to get what they want when the market settles down. For those who have to buy now, the shoppers who are willing to give in a little – maybe forego the fireplace, or buy just inside Kenmore rather than North Buffalo – are the ones closing deals. Kaisertown, Lovejoy, Hamlin Park, the Fruit Belt, and other Buffalo neighborhoods nobody expected to draw attention are starting to get multiple offers.

“The ‘must-have’ lists used to be mostly met, but now the flexible buyers are the only ones getting houses,” says Karp. “But in the rush to get anything, I worry that people will settle for the house without the driveway, let’s say. Then the market swings back to the buyer’s favor, their house has no driveway, they get a job somewhere else, and they can’t sell their house. You have to look ahead of emotion and realize that ‘ok for now’ is still shortsighted. Buyers have to be flexible and sensible at the same time. But at the end of the day, homebuying should be a happy experience – not one where you end up house poor and stuck.”

Saccone says these market conditions mean that real estate agents representing buyers have to be diligent about educating their clients about the realities and potential pitfalls of the road ahead.
“In our buyer consultations now, we talk about preconceived notions and assumptions and what might happen,” says Saccone. “We’re honest that we’re getting in the boat together, and it might be pina coladas — or it might be rough seas.”

Still, as pricey as homes are getting in and around the Queen City, they’re nothing compared to average home prices in most other cities.

“If you’ve never left the bubble, you think these prices are ridiculous,” says Bookhagen. “If you’re coming from outside the bubble, you think our housing stock is incredibly affordable. People also have a tendency to look back at what a house cost when they were young and compare it to what houses are selling for now. You’ll probably find that in any blue-collar town. They work hard for every dollar, and want it to go as far as it can especially when wages aren’t what they are in the rest of the country.”

“It’s still a win-win for sellers and buyers right now because rates are still low, taxes are low, and operating costs are still lower, so you can get into a $200,000 house for about the same per month as rent at the apartment down the street,” Quagliano explains. “Then you have the equity to pull out later. You can’t live cheaper by renting. A two-unit can cover your mortgage. I don’t think it’ll increase much more. The rents did get higher faster, but mortgage interest helps owners save on taxes. Income property can help pay off loans. There’s so much to home ownership that’s still smarter than renting.”

The prevailing expectation, which is starting to show in home sale data, is that the residential real estate market will level out soon, mostly because mortgage interest rates will probably go up. Saccone also points out that wage stagnation and lack of job growth for higher-paying positions in this area will eventually cap the number of people who can afford to buy at the prices being asked.

“If the housing growth is emotional and driven by interest rates, and the jobs and wages don’t keep up, it won’t last,” says Saccone.

Mayfield says the market isn’t likely to tank completely, though.

“The interest will never go away completely,” she says. “If you grew up here, you’re probably staying. Buffalo people love Buffalo. It’ll be interesting to see what happens.”

Homeownership 2.0

When stories of Buffalo’s residential real estate hysteria hit the airwaves, it’s easy to picture eager 20-somethings just bursting to dip their toes into homeownership. But it’s not just first-time buyers who are showing interest in Buffalo. The city and its amenities are becoming increasingly appealing to suburbanites approaching retirement, who are selling empty nests and competing with first-time homebuyers for affordable ownership close to the action.

The Witkins are a couple in their mid-50s who recently sold their Williamsville family home of 25 years to enjoy city life. Lisa, a counselor at School 45, and Harris, an independent insurance agent, said the idea first came up around two years ago.

“With everything that was going on in the city, I said to Lisa, ‘We’re going downtown all the time, the kids are done with college, what do you think of moving downtown?’” explains Harris. “She took it under consideration, but we weren’t certain.”

“Then earlier this spring I was running with Girls on The Run down Bidwell Parkway, and I looked around and said, ‘Why don’t we live here?’” says Lisa. “The trees had just bloomed, and there were so many people out. I came home and told Harris I’m ready, and I’m tired of commuting. Now I’m four minutes away from work. Harris’s commute is the same, but it’s going in the opposite direction of everyone else.”

At first the Witkins looked at condos for sale, but found them in short supply. For now, they found a roomy, new loft rental in Allentown with off-street parking, permission for their two dogs, and plenty of open space to entertain. Their plan is to rent for two years and see which of the areas of the city might be the best fit for them.

“It made sense for us to sell now,” says Harris. “The bubble might burst, interest rates are going up, and I think two years from now it’ll be a better time to buy, price-wise. And it sounds like there will be more new build options coming on line.”

While leaving neighbors they’ve had for decades felt bittersweet, especially for Lisa who grew up in Williamsville, the couple is happy about their downtown relocation and have heard from friends who are considering a move themselves.

“I’ve seen my daughter Becca almost every day,” says Lisa. “She lives less than a mile away. If I’d have known that, I would’ve moved two years ago! I love walking the dogs through the neighborhoods and past the gorgeous homes.”

“We’ve always loved the homes,” says Harris. “But as you walk instead of drive, you appreciate the details more. I’m still getting used to city noise. But it costs the same monthly to own and rent — and I don’t have to mow the lawn anymore.”

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