The Stability of Upstate New York’s Housing Markets

Recently the Federal Reserve Bank of New York published an article, Bypassing the Bust: The Stability of Upstate New York’s Housing Markets During the Recession. While we frequently hear national media reports on the collapse of housing markets in some parts of the country, regions like Upstate New York have not been affected.

Buffalo, Rochester and Syracuse all ranked in the top 10% of metro areas in terms of home price appreciation in 2009. Yes, that’s not a typo….it’s supposed to say price appreciation! We also have had lower rates of delinquency and foreclosure the article states because we didn’t have as many subprime (or nonprime as the article labels them) mortgages taken out during the year preceeding the recession.

Areas like California, Nevada, Florida had a lot of buyers securing subprime loans – many of which went into default. These are the same states that had a dramatic and steep rise in housing prices during the “boom” years. Combined with lenders issuing loans to individuals with poor credit scores and a high debt to income ratio, it was a disaster waiting to happen.

Nationwide, between 2005 and 2008, home sales dropped 30% nationwide. But the good news for Upstate NY was a decline of only 10% in sales across the region. If you look at Chart 1 on page 2 of the article, you can see the steady trend in sales over the past decade.

In terms of home prices, from 2000-2006 Rochester saw an increase of 3.8%; Buffalo 4.8%; Syracuse 6.2% and Albany 10.1%. Even during the recession years, Albany only saw a drop of 1% while the other cities saw an increase of 1% – 2.3% from 2008-2009. In fact, Elmira saw a 6% increase in home prices from 2008-2009. Looking at Chart 3 of metro areas home price appreciation from 2000-2008, you find cities in California and Florida down 15-25%. Some communities are still in a free fall and haven’t hit bottom yet.

While homeowners and agents alike were envious of the home sales and price appreciation in other markets during the boom, sometimes slow and steady wins the race. Some communities have been devestated by the housing “bust,” but in Upstate New York our housing market remains stable and is an important economic driver in our communities.

If you’re thinking of buying or selling but have been hesitating because of the market conditions, contact a Nothnagle agent today to get the real story on our housing market….you may just be surprised at what you find!

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