Promising housing markets are the first indications investing in real estate, whether for short or long term gains, is a good idea. In the US, only 18 markets are demonstrating strong performances in real estate since the market crash in the late 2000. Buffalo is among these states and it’s no mystery why.
Record Rise in Real Estate Values
According to the Federal Housing Finance Agency or FHFA, Buffalo ranks 14th along with Grand Rapids for locations with home prices that have risen beyond 25% since 2007. As analyzed by Business First, Buffalo real estate prices climbed from 145.50 points in 2007 to 183.19 points in 2017. This corresponds to a gain of 25.9% rise in value of a typical home in the Buffalo area. A third of the top real estate markets all still struggle to recover, with most markets posting average house prices way below the minimum before the recession.
Another analysis based on Zillow statistics support this trend. Business First analysed the housing trend from 2010 to 2017 and showed that Buffalo ranks 27th in real estate value gain of 29.1% from 2010 to 2017. A typical house in Buffalo valued at $115,400 is now valued at $149,000 in 2017, a rate that is higher than the national average for the same period.The site calculated that Buffalo’s annual growth rate was 3.7% a year, higher than the 3.3% annual national rate. Currently, Las Vegas and San Jose have shown the fastest growth in the same time period, posting increases in real estate values of 75% and 76.4% respectively.
The Buffalo Niagara Association of Realtors (BNAR) echoed this analysis, saying that housing prices in the area are the highest they have ever been. Average homes are going for $152,000, which is $5000 higher compared to the previous year. In June, the average price rose to 171,000 and went up to $173,000 in July. These are record prices for any month of the year and the first time since average prices have gone beyond the $170,000 mark.
Demand for Hot Properties Strong, Inventory Down
Demand for real estate is strong, with the association estimating a 31% decline in homes and properties for sale in the area, an environment that further promotes the increase in values. Houses spend an average of 33 days on listings before they are sold. Hot properties take even shorter to sell, with some lasting for about a week on the market. This is a citywide trend, with most sales happening all around Western New York and the suburbs.
However, while sales are increasing, few homes are being added to the market. For example, the April inventory was down 13.6% compared to the previous year, which means that the current supply may run out in a little over 5 months.
Bidding wars are frequent, with buyers expecting to offer more than the asking price because of multiple offers. Experts are also advising home buyers to come in pre-approved to give them a leg up over other potential buyers.
This is a good sign, according to the BNAR CEO Jonh Leonardi. Growth of average and median prices continue to rise but at a moderately reasonable rate, opposed to the rapid increases that contributed to the housing market bubble. Moderate yet steady increases in home values show controlled growth, an indication that the Buffalo market is steadily catching up with the rest of the country.
How to Invest in Buffalo Real Estate
Potential investors have varied options for real estate investing, whether they prefer short term or long term real estate options. Those who plan on buying real estate can definitely expect their home values to shoot up a few years down the road, which makes a first home purchase a good primary investment opportunity.
Home buyers looking for properties to flip for sale or for rent also have many options in Buffalo and the WNY, from properties in prime areas to those located in up and coming neighborhoods. Properties for those who are planning on selling real estate are sure to produce great returns in established neighborhoods like Elmwood Village, Williamsville and Kenmore, making them great choices for investors who can afford the higher-than-average cost of entry. Neighborhoods showing promising growth include Grant-Ferry, West Side and Lower West Side offer good, affordable deals for investors and buyers looking for more affordable options for flipping real estate or rehabbing properties for sale or rent. The lowest prices can be found in neighborhoods like East Side, Black Rock and South Buffalo, but development in these areas is also looking up, which means that real estate prices could also start climbing.
Current State of the Market
The Buffalo real estate market is the strongest it has ever been, which means that there is no better time to purchase property in the area, whether as a primary or secondary residential or for investment purposes. Economic and job reports for Buffalo are getting better, and stock prices are rising all across the country, and buyers are confident now more than ever. Interest rates also remain low, although they are expected to pick up as the economy continues to recover. Potential investors are advised to keep a watchful eye on the market, since properties up on offer are on the decline and bidding wars are becoming the norm.
Why Invest in Buffalo NY
A strong real estate market with steadily climbing real estate values is more than enough reason to invest in Buffalo real estate. Buffalo boasts of a high quality lifestyle paired with low cost of living, which definitely appeals to many home buyers. Far from being a sleepy, backward town, Buffalo offers cultural diversity with great options when it comes to schools, entertainment, museums, historic attractions and food.
Access to excellent schools and family-friendly establishments make Buffalo suitable for families with children. The presence of colleges and universities, various enterprises that support the tourism industry, and a large waterfront also means that enterprise is alive and well in Buffalo. Those who are planning on investing on rental real estate will find that the rental market is also very robust.