Because my dad was a cop in the city of Buffalo (look for my best-selling memoir of the first 18 years of my life hitting bookstores soon....) I inherited some personality traits during those formative years that prove to be effective during times like these. One such trait is a pronounced and scrappy tenacity. In the face of adversity, I tend to furrow my brow, roll up my sleeves and god help anyone who gets in my way. As the first leaves of autumn began to fall, so too did my concern that I was suddenly going to be subjected to a life of penury. We regained a lot of lost ground and found that our sales were only 5% lower than they had been for the same period in the previous year. Ultimately, at year’s end, the team and I sold $57,000,000 worth of real estate- a decrease in sales from the previous year of 9%. Not great, but better than the initial numbers that we’re hearing from the Greater Rochester Association of Realtors.
Now, before I go any further, it’s important to mention that, although volume was down and buyers had a difficult time finding homes to purchase, sellers were having a great time. Property values increased 8% year over year. Homeowners continued to recognize the benefits of owning vs. renting. The most recent study conducted by the Federal Reserve’s Survey of Consumer Finances showed that the net worth of those who own their home is 44% higher than the net worth of those who rent.
There are signs that the worst of this may be over. I’m not suggesting that it’s going to be as robust a market as we experienced in 2017, however, this coming year probably won’t be as difficult a market for buyers as the previous twelve months. Given the volume of transactions that the team and I are engaged in every year, we can oftentimes see, six months in advance, how the market is going to perform. One of our leading indicators is a tally of how many properties we will be putting on the market for sale in the near future. It looks as though inventory levels are going to rise which may relieve some of the pressure that buyers have experienced. This is probably a good thing. Why? Increased inventory means that property valuations will begin to slow a bit. The last thing that anybody wants to see is another real estate bubble that catalyzes a larger economic slowdown. Diminished price appreciation allows for wages and salaries to catch up which, ultimately, means a stronger housing market moving forward.
If you’re a seller and want to enjoy the last gasps of the exuberance that defined last year’s market, I’ll offer the same advice that I have in years past. If the weather remains good, consider listing your home for sale in January or February. Once the last of the confetti has been swept from Times Square, buyers are on the prowl. Sellers, on the other hand, traditionally wait until March 1st to list. In doing so, they’re only increasing the likelihood that they will have more competition. We’re proud of the fact that, this past year excluded, our January sellers are often selling their homes with multiple offers in contention, driving up the value of the property. Give us a call if you’d like details.
What We Can Expect
Looking forward, there are any number of factors that will probably end up impacting real estate activity both locally and nationally. Rising interest rates, trade wars, a global economic slowdown, continued stock market turbulence, and technology all seem like potential disrupters. Locally, it will be interesting to see how it is that downtown Rochester continues to evolve as a residential center. The first girders will be driven into earth that was, until recently, the Inner Loop. This spring, Christa Construction will begin construction of a mixed-use site on East Avenue and Union Street. Alexander Park on the site of what, at one time, was Genesee Hospital, will begin to take shape. If you’ve driven Route 490 over the Genesee River, you’ve certainly noticed the Court Street Apartments rising along South Avenue. Sibley Place continues to grow and the Cadillac Hotel may even begin to show signs of new life. Within the year, the long-anticipated metamorphosis of downtown should finally start to reach critical mass.