Is cold weather to blame for Buffalo’s real estate market being in “good shape?” Yes, according to a story in New York City real estate magazine The Real Deal authored by The Buffalo News’ Kevin Purdy. In the August issue, The Real Deal looks at some of America’s housing markets that have weathered the current mortgage industry and national housing slump:
The housing markets from coast to coast are so depressed that even Buffalo, a classic Rust Belt city with virtually no new developments, ranked in the top five metro areas for median housing price increases.
While the lead is unflattering, the story is generally positive and notes that median sales prices in Buffalo-Niagara rose 5.5 percent in April while national median prices fell 11 percent.
Buffalo Stays Cold- and Calm. Blue-Collar Town's Trademark Winters Kept Speculators at Bay.
Here homes sell in 60 to 90 days, at reasonable prices to buyers who usually plan on moving their families into them. That slow-but-sustainable growth, once just another reason to look South and be shamed, has left the Buffalo Niagara region ranked 12th in the nation for growth, according to the National Association of Realtors.
"We're not doing super-fabulous, we're not booming, we're just doing well," said Kulikowski, now an agent with Hunt ERA in Wheatfield, a suburb north of Buffalo.
So how did Buffalo keep its housing attractively affordable, yet mostly secret from over-extended prospectors and quick-fix flippers?
A big part of the answer lies in the city's slow transition to a fast-paced service economy. Most of the city's neighborhoods are still tightly knit and rooted in blue-collar families and traditions — properties are seen as homes, much more than growth investments, realtors said.
While there are sprawling new buildings in outer-ring suburbs, the vast majority of the area's housing stock is more than a century old, and any potential speculator has to contend with Buffalo's trademark winters.
Susan Lenahan, a veteran agent at MJ Peterson focused on city properties, said that in the last few years she's had dozens of out-of-towners call about multi-unit properties for sale.
"A lot of novices, rookies, [were] drawn in by the prices they [saw] ... but they realized, especially with these lower-priced houses and rents, that management fees ate up whatever profits there were," Lenahan said. "In the end, I didn't have too many takers."
But while the numbers may partially explain Buffalo's respectable gains, Lenahan and others believe there's a reality-checking character to Western New York that keeps the market steady. She remembers telling two southern California teachers in February not to visit if they were looking for cheap rental properties to turn around, but the duo flew out anyway. Lenahan took them around to tour some multi-unit properties.
"They had a total of $60,000 and wanted to buy two, or maybe three properties," Lenahan said. "It was February in Buffalo. Ten degrees, snow on the ground ... They knew right away it wasn't like they'd probably thought."
The story does play up some of the new development happening in the city:
Almost every developer in town has a condo conversion project on deck.
And developers aren't just converting vacant apartment buildings: There's the former TV-dinner factory in the outer Lake Erie harbor priced at about $200 million; a federal office building, priced at about $63.6 million, with a hotel and office space; and a 23-story tower, built on the site of an iconic restaurant, priced at about $55 million.
Even inner harbor development, long the economic counterpart to the city's maybe-this-year sports championship drought, is getting a kick start, with a $30 million mixed townhouse/condo project slated for completion this year.
But loft conversions aren't the real story behind Buffalo's seemingly effortless ducking of the housing crunch.
James Knight, president of the Buffalo Niagara Association of Realtors and a commercial agent with MJ Peterson, said the subprime mortgage crash didn't take root in Buffalo, mostly because subprime mortgages weren't necessary for most buyers.
"A family making $30,000 a year would really have to stretch to buy that home elsewhere, especially when you factor in cost of living. Here, they can just about afford it...they don't need an artificially big mortgage out of the box to get it."
Full story here.
Photos by Mark Hogan