Don’t expect the record home prices and bidding wars to end any time soon.
Nick Giambra, head of Keller Williams Realty WNY’s The Giambra Team, points to his listing for 184 Norwood Ave. on Buffalo’s West Side. Starting with a list price of $250,000 on Jan.
12, the house had 44 private showings, seven offers and sold for $377,000 in less than three weeks.
“I don’t see any end in sight for where we are,” Giambra said. “People, and there are a lot of them, are out looking. I’m not the only one seeing this. Ask around and you’ll get the same answer.”
Limited inventory, low but climbing interest rates and customer demand are fueling the strong residential market.
The Buffalo Niagara Association of Realtors reported 1,107 listings in January 2022, down 16.2% from the 1,321 listings in January 2021. That amounts to a one-month supply.
There were 694 new listings in January, compared to 717 for the same month a year earlier, a 3.2% decrease, according to BNAR.
Tom Mazzone, founder of New York State Realty LLC, listed a five bedroom, 4,621-square-foot house on Rockhaven Drive in Clarence’s Spaulding Lake subdivision with a $1.395 million asking price.
The listing went live on Super Bowl Sunday. By lunch the following day, Mazzone had booked six showings.
“For any listing, the number of showings I get in the first five days tells me a lot and speaks volumes,” Mazzone said. “The same sellers’ market momentum we’ve seen and I’ve seen for the past three years isn’t slowing down. Just the opposite, if anything.”
According to the Federal National Mortgage Association, the interest rate was 3.56%, as of Feb. 14, compared to 2.73% on Feb. 14, 2021. In late 2018, interest rates were 4.54%.
A bump of 1 percentage point equates to a $55 per month increase in a 30-year, fixed-rate mortgage, according to Fannie Mae calculations.
“That’s what, the price of a pizza, wings and a couple of beers?” said Ryan Brandenburger, CrossCountry Mortgage LLC Buffalo and Boca Raton branch manager. “We are still dealing with a supply and-demand issue.”
“Our phones are busy,” he said.
Hunt Real Estate’s Judy Jack Lewis wrote $2 million worth of new contracts in January, normally a slow period in residential real estate. One listing on Nicholson Street in North Buffalo had 23 showings in the first four days.
“In my 30-plus years in this business, I’ve never seen a cycle like we are seeing now,” Jack Lewis said. “Never.”
Pre-Covid, BNAR averaged 3,000 homes in its monthly inventory. For a typical listing, brokers averaged three offers and a rare bidding war.
“But I think there is more common sense (about bidding) out there,” said Terri Campbell, a broker with M.J. Peterson Real Estate.
Title searches in demand
Paula Bochacki’s job is predicated on history.
Bochacki, business adviser for the Fidelity Family of Cos./New York Agency Division, oversees a 31-person local staff that traces a property’s history as part of the title-search process. The title search, or abstract, focuses on past owners and checks for red flags such as outstanding liens and back tax issues. A title search is required in a closing.
Locally, the Fidelity Group of Cos. – based in the Liberty Building – includes Chicago Title Co., Commonwealth Title Co. and Fidelity Title Co.
The rise in real estate deals, especially on the residential side, created a banner period for Fidelity, Bochacki said.
“Last year was incredible,” she said.
Much of the boost came from residential sales and refinancing, which accounted for 35% of title searches last year.
“Low interest rates do create a trickle-down effect,” Bochacki said.
But the surge has caused the title search turnaround time to increase from two weeks to three to six weeks, depending on the property’s history, Bochacki said.
“Even now (the first quarter), we are busy when in years past, it wasn’t this busy,” Bochacki said. “(2022) looks like the past few years, with a lot of deals and lots of work for us.”
Unprecedented time for appraisals
David Barnett can’t pinpoint the exact date but he knows business has picked up.
“To say we’ve been busy is a bit of an understatement,” said Barnett, one of three partners in GAR Associates LLC, based in Amherst
GAR, a 60-year-old firm, specializes in real estate appraisals for a mix of residential, commercial and municipal clients. Appraisers are hired, typically by banks and financial institutions, to provide objective and impartial opinions on the value of real estate. It is a key, pre-closing element in real estate transactions.
As interest rates dropped, real estate deals began to spike. Barnett said the surge in work began when the 30-year fixed-rate dropped from 4.54% annual average in 2018 to 2.96% in 2021, as tracked by Fannie Mae.
GAR’s workload will continue to grow this year as real estate, especially residential, remains active.
Appraisals for residential sales can take from one to three weeks. Commercial appraisals average between three and five weeks. Before the spike, both commercial and residential appraisals usually turned around between seven and 10 days.
Published by Buffalo Business First