10 years after housing market crash, how Rochester is faringMary Chao, Rochester Democrat and ChroniclePublished 7:00 a.m. ET Aug. 8, 2018David Richard and Kate Burt say they wanted more space and
10 Years After Housing Market Crash
10 years after housing market crash, how Rochester is faring
David Richard and Kate Burt say they wanted more space and thought it was time to build equity. (October 2017) Jamie Germano
On a beautiful Sunday with cloudless skies, potential home buyers crowded an open house in central Brighton. Priced at $299,900, the just listed two-story home is completely updated and in a walkable neighborhood. Families move through briskly and admire the upgrades. By the next day, purchase offers will likely file in.
Multiple offers are common in today's market, especially for homes in good condition. Buoyed by what's been a sellers' market for the past four years coupled with low inventory, buyers are trained to move fast or lose out on a home. The financial market prompted by real estate speculation precisely a decade ago this August is all but a distant memory.
Rochester was never a speculative building market. While the regional real estate market quickly turned to one that favors buyers, the Rochester region didn't face the wrath that ensued in areas such as Florida and Arizona.
Howard "Hoddy" Hanna III, CEO of Howard Hanna Real Estate, vividly remembers the market crash and the Great Recession. Prior to the correction and in the early 2000s, the market was freewheeling. Lenders let people buy more than they could afford for homes. There were creative loans such as NINJA, no income, job or assets, he recalled, and subprime lenders were prevalent.
Homes went into foreclosure and many investors purchased the homes to rent to people who may have lost their homes, Hanna said.
Today, inventory is tight all around the country as investors still own many single-family homes, said Hanna, whose Pittsburgh-based realty firm that acquired Nothnagle Realtors and Realty USA is the fourth largest in the country. Lending tightened significantly immediately after the crash, but it has reached a balance. Buyers, for the most part, need a 3 to 5 percent down payment, decent credit and proof of income to obtain a loan, Hanna said. The days of NINJA loans are over.
Home sales in Monroe County fell by 4.5 percent during the second quarter of 2018, but the median sale price rose by more than 9 percent to $152,000, according to data released by the Greater Rochester Association of Realtors.
Housing markets across the country are very active so far this year, the Realtors' group said. The Greater Rochester region, including the Finger Lakes and Southern Tier, is among one of the more active markets.
Inventory has been a persistent issue for the past few years when it comes to sales of existing single-family homes, said Linda Wilson, president of Greater Rochester Association of Realtors. However, she is seeing a change in the situation. With the total number of homes for sale in the region trending significantly downward over the last few years, a 3.9 percent increase in new listings for the region in the month of June compared to June 2017 was encouraging news for buyers patiently awaiting more housing options, she said.
Realtor Rome Celli of ReMax Realty Group, who has been in the real estate business in Rochester for 39 years, recalls when the market stood still in August of 2008. For about 5 months after, people were afraid to make big-ticket purchases.
Fast forward to now and the economy is booming. There are many millennial buyers in the marketplace and homes priced well in good condition fetch multiple offers.
"It's a stark difference," Celli said. "There's optimism in the real estate market."
However, Celli does see the market slowing a bit mid-summer compared to spring. Fall may or may not mean a brighter selling season.
Hanna of Howard Hanna thinks the Rochester real estate market should remain relatively stable the next year to year and a half. The next 18 months should be the same as the past 18 months, he said.
Mary Chao is the real estate and retail reporter at Democrat and Chronicle. Her weekly real estate features may be found Saturdays in Real Estate and Rental and online at DemocratandChronicle.com. Email her at [email protected].
Real Estate is my passion and I have served over 100+ clients and the excitement of seeing them get into their new home never gets old. Some never even thought they could buy or ever own. I love ser....
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