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Aug 04, 2020

Despite pandemic, it’s a feeding frenzy in Buffalo Niagara housing market

Forty-two offers.

That’s how many different would-be homebuyers bid on Scott Sciumeca’s father’s Cape Cod-style house in the Town of Tonawanda – which he built in 1954, and where Scott and his sister grew up.

With the number of homes for sale at its lowest in more than 22 years, homebuyers are scrambling to find houses they want to buy. And when they find one they like, the competition is often intense, even during a pandemic and a recession that has pushed unemployment to nearly 14%.

“Insane,” Sciumeca said.

The 42 offers came after more than 170 people walked through the home during a weekend of open houses and private showings. Some went through just a half-hour before the deadline for offers.

“It was quite a shock,” Sciumeca said. “It was beyond what I could have imagined.”

In the end, less than a week after it was listed for sale, and after just two hours of deliberations, Sciumeca and his sister accepted an offer of $170,000 – over $45,000 more than they were seeking. They rejected two offers for even more – $175,000 – because they didn’t feel secure with the financing terms that were proposed.

“We were not trying to lowball to get in extra offers. We thought that was what it should be priced at,” Sciumeca said of the $124,900 list price. “We never dreamed in a million years that it would sell for what it did.”

Sciumeca’s experience is on the upper end of what home sellers in the region have been experiencing for months, but it’s certainly not unique. Nor is it even the highest. One broker reported 48 offers on a Cheektowaga house, while others have talked of as many as 80.

Home sales are back in action in Western New York following a weekslong suspension during the coronavirus pandemic.

“It’s nuts,” said Jerry Thompson, broker-owner of Century 21 Gold Standard in East Aurora, Sciumeca’s agent. “If it’s priced right, if it presents right, and it’s marketed well, it’s getting multiple offers.”

Conditions were already heightened even before Covid-19 struck, because of the severe shortage of homes for sale in the past two years. Add to that all the sellers who didn’t list their homes in the last few months because of the pandemic, and the buyers who stayed home in April, May and June but are now out looking, and you have a mismatch between supply and demand.

“I don’t see any stopping it,” said Hunt Real Estate Corp. agent Brian Hillery, who had three new listings this past week, with 150 showings between them.

One of his listings – an Orchard Park house that was offered at $200,000 and ultimately went for $240,000 – had 75 showings. That means “there’s 74 other people looking for houses in the Orchard Park area,” he said.

One of Hillery’s clients bid $300,000 for a three-bedroom, 1,800-square-foot home in West Seneca that was listed at $260,000 – and lost.

“Forty thousand over, and you’re still not even the highest bidder,” he said. “It was just crazy.”

Real estate agents and clients now regularly cite such bidding wars on sought-after homes, as buyers descend on every new opportunity the moment it hits the market. It is commonplace to get 15 to 20 offers on a house.

The dearth of options has forced would-be buyers to concentrate on fewer available properties. So in some cases, agents are now seeing “dozens of offers,” said Greg Straus, co-broker and co-owner of 716 Realty Group. “It’s definitely a wild time to be in the business.”

The frenetic activity has caused agents to conduct the sales as informal auctions, listing homes early in the week to allow excitement to build, before holding open houses on the weekend and then demanding all offers by the following evening. In turn, that only encourages a bigger run-up in prices, as buyers and their agents try to put their best foot forward to outbid the competition.

Besides overwhelming the sellers and their agents, that has led to a significant jump in prices, with buyers pushing up valuations by tens of thousands of dollars. Jacque Taylor, of Weichert Realtors Stovroff & Taylor Real Estate, cited a house priced in the mid-$200,000 range that received 21 offers and sold for $60,000 over the list price, while another listed in the mid-$300,000 range sold for $70,000 above asking.

“There’s so much demand, the law of economics has taken over,” Straus said.

And that’s generated incredible stress and frustration for buyers – many of whom have lost out repeatedly on what they thought was their dream house.

“It’s hard for buyers,” said Susan Lenahan, a veteran agent with M.J. Peterson Corp. “How many houses are you going to lose?”

Sarah Dow and her her boyfriend, Kevin Huss, have been searching for their first home for the last three months, but have struck out 15 times. Dow, a 26-year-old nurse on the Buffalo Niagara Medical Campus, and Huss, a 25-year-old chemical engineer, are seeking a starter home in the $100,000 to $130,000 range, ideally in the Southtowns. The couple typically spends three to four hours visiting houses every Tuesday with their agent, Vienna Haak of Howard Hanna Real Estate.

“We don’t even go to open houses anymore,” she said. “You show up, get in line, and there are 30 to 60 people waiting.”

Dow said she’s been preapproved for a 15-year conventional mortgage, with a 5% down payment. But her maximum price is $135,000.

“I don’t intend to offer more than what my max is,” said Dow, a Long Island native who came to Buffalo for school. “I want my home to be an investment. I don’t want it to be a burden.”

Sciumeca and his sister decided to sell their family house, off Niagara Falls Boulevard, after their father went into assisted living last year. The 1,800-square-foot house was already in Sciumeca’s name and he had been living there to take care of his father, although he had already purchased his own house last summer.

The house had been remodeled and expanded in the distant past – with a raised roof, a new family room and foyer, and an extra bathroom – but it was “in serious need of updating,” so they priced it low, Sciumeca said.

Century 21’s Thompson listed it March 10, just before 3 p.m. It was right before the state shut down virtually all activity to fight the spread of coronavirus, so there was already a sense of urgency. Within 15 minutes, the first showings had been scheduled, and the parade never stopped, as Sciumeca got text alerts for every showing.

He couldn’t even get in to clean the house between showings. “There were people basically there from 9 in the morning to 9 at night,” he said. “There was not an hour I could find to go there other than the middle of the night.”

The broker held open houses on March 14 and 15, and asked for offers by 6 p.m. on March 16. Thompson said he and his staff took several hours going through the offers before sitting down later that evening with Sciumeca and his sister. That’s when the family learned the extent of the interest.

Sciumeca said Thompson told him neither he nor any of his agents had seen anything like this before. The agents had even started taking bets in-house on how high the offers would go – and didn’t come close.

Sciumeca said they quickly ruled out the majority of offers as too low – “why waste your time looking at an offer at $135,000 when you’ve got an offer for $175,000?” – and focused on the top half-dozen. The two highest offers were not as straightforward as the one that Sciumeca and his sister selected, and the sellers feared they might fall through because of the appraisals. The sellers also considered the buyers’ employers – but not their salary or position – to assess the stability of their income during the pandemic.

Ultimately, they selected the slightly lower offer from Joe Brown of Buffalo and his girlfriend, Kindra Sinclair, who have two children and one grandchild living with them. Sciumeca said their first-time homebuyer offer carried a conventional loan and a “sizable” downpayment. Brown – who works in operations for General Motors Co.’s Tonawanda engine plant – even waived the home inspection.

“We had all of our best terms lined up, because we knew it was going to be very, very competitive,” said Fawne Carver, an agent with the Samantha Muscato Team at Keller Williams in Buffalo, who represented Brown.

“It doesn’t really matter when it comes down to listing price. It’s not like an investor,” she said. “It’s somebody that wants to raise a family there. They’re willing to go above asking because it’s worth it to them.”

Published by The Buffalo News

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