10 Real Estate Markets to Watch in 2011 | Inman News

2. Buffalo-Niagara Falls, N.Y.
Total population (2009): 1,123,804
Median sales price (Q4 2010): $126,500
Median sales price % change (Q4 '09-Q4 '10): 14.3%
Sales volume (# units sold year-to-date in Nov. 2010): 14,401
Sales volume % change (Nov. 2010 vs. Nov. 2009): -12.3%
Unemployment rate (Dec. 2010): 8.2%
Foreclosure activity rate (2010): 1 in 332 units
Walk Score: 51



The delinquency rate in the Buffalo-Niagara Falls metro area stayed essentially flat between November 2009 and November 2010, at a relatively low 4.1 percent. The area's foreclosure activity rate fell 43.5 percent in 2010, to one of the lowest rates in the country. One in 332 housing units received a foreclosure filing last year, compared with 1 in 45 units nationally.

RealtyTrac also included the Buffalo market in its top 10 list of markets for buying and investing, which took into account decreases in REO (bank-owned) inventory, as well as higher discounts for foreclosure properties compared to nonforeclosure properties (see RealtyTrac chart).

"(Lower REO inventory) is important because when you hear people talking about shadow inventory and inventory overhang having an effect on prices, that's an indicator that inventory is being whittled away," said Rick Sharga, senior vice president of RealtyTrac.

Higher foreclosure discounts indicate healthier markets because that means foreclosures are having less of an impact on the sales prices of nonforeclosure properties, according to RealtyTrac.

"When we first started tracking, Las Vegas had one of the lowest foreclosure discounts in the country. When you get beyond a certain percentage of sales that are foreclosure-related, it takes the whole market down with it," Sharga said.

The Buffalo market has one of the fastest-rising median list prices in the country, according to Realtor.com (see Realtor.com chart). Buffalo was also one of the few markets to see its median sales price rise from the year before in both 2009 and 2010, according to NAR's data. Even so, 85.8 percent of the market's homes were affordable to households earning the area's median income in the fourth quarter of 2010.

"The Buffalo market is incredibly brisk, incredibly strong -- especially in the urban areas. I am having houses sell over the asking price in one day and certainly in one week. I've just had one this past week sell a thousand (dollars) over the asking price in one day. I don't have enough inventory for the buyers who are out there at certain price points," said Susan Lenahan, an agent at MJ Peterson Real Estate in Buffalo.

"Buffalo is different than the rest of country. We have a very stable market. It didn't go up dramatically, (and) didn't go down dramatically."

The Buffalo metro area has its share of federal entities. The area is home to one of seven districts for the U.S. Army Corps of Engineers, a field office for the FBI, the Niagara Falls Air Reserve Station, a field office for the Department of Homeland Security, and the headquarters for the U.S. District Court for the Western District of New York.

Buffalo also hosts New York's largest state university and high-tech jobs in the medical industry, Lenahan said. Yahoo operates a data center on the outskirts of Buffalo, and Verizon is considering a data center in Niagara County.

"Those kinds of business opportunities were not typical in Buffalo before. It's no longer a Rust Belt town," Lenahan said.




10 Real Estate Markets to Watch in 2011 | Inman News