The Buffalo Niagara housing market is still tight, but there are signs that the upward pressure on home prices is losing steam.
Home prices still are rising at a moderate pace – and the median sale price in July hit a record high – but the pace of the increase is half of what it was a year ago.
Homes are still selling quickly – the average home is on the market for a little more than a month before it sells, according to new data from the Buffalo Niagara Association of Realtors.
And sales remain strong, although the pace continues to run slower than last year as rising prices cut into affordability and record low listings limit the choices buyers have.
Still, the local housing market remains tilted in favor of sellers, with only enough homes on the market to absorb three 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.
Rise in home prices slows
The median sale price rose 5.4% over the past year.
Solid demand and a limited supply is a recipe 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 third-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 July rose to a record $168,000.
“Low mortgage interest rates have helped offset low housing affordability, but high home prices are outpacing median household income growth,” the real estate group said in its monthly report.
Sales are solid, but slowing
While buyers are scrambling for a small supply of homes and grappling with steadily rising prices, the pace of home sales has been slowing for 21 straight months.
Home sales have slowed by 3.6% during the last 12 months, on an annualized basis, after dropping by 3.1% 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 four years, but activity remains comfortably above the pace from most of the last two decades.
Homes are in short supply
Fewer homes are for sale, and new listings are flat.
The number of homes for sale fell by 4.5% 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 could be abating, however, with new listings up by less than 1% through the first half of this year. Over the last five years, the number of homes that are up for sale has been cut almost in half.
Homes are selling quickly
Homes that sold during July were on the market for an average of 32 days.
Homes still are selling briskly in a market with inventory shrinking and mortgage rates falling again. The average home that sold last month was on the market for 32 days, two days longer than last July, but still 16 days faster than 2016.
Don’t expect much dickering
With demand strong and options limited for buyers, home sellers also are able to hold fairly firm to their asking price. The average home that sold last month went for 99.8% of its most recent asking price.
The only other times that sellers budged less off their asking price was last year, when the average home sold for a little more than the list price during June and July 2018.