| Rochester’s Real Estate Market: Standing Strong Amid National Shifts |
| Breaking National Records Just as Josh Allen can’t stop smashing records on the football field, Rochester’s real estate market is delivering record-breaking stats that leave the rest of the country in the dust. Our community continues to defy national trends, standing out as one of the hottest markets in the country. While other regions are seeing cooling demand and rising inventory, Rochester remains fiercely competitive, presenting a blend of challenges and opportunities for both buyers and sellers. A Vivid Picture: – Compared to December 2023, housing inventory in Rochester has dropped by 24%. (Redfin) – Over the past five years, the decline is even more pronounced, with 53% fewer homes available. (Redfin) – Meanwhile, property values have surged by 7.4% in the last year, ranking Rochester seventh nationally for home price appreciation. (Reventure) – 68% of local homes sold in bidding wars, the highest rate in the country. (Stacker) – On average, these homes sold for 8.7% above the list price. (Stacker) – Such compelling data recently placed Rochester in the top seed of Zillow’s Heat Index- a ranking of the nation’s most competitive real estate markets. (Zillow) The Still-Beleaguered Buyer While inventory has risen by 8% nationally, Rochester grapples with an intensifying local shortage, making homebuying more challenging than ever. Coupled with rising mortgage rates, these conditions put tremendous pressure on buyers. Sellers, obviously, prefer all-cash offers, leaving those who need financing at a disadvantage. Given that all-cash transactions now make up 26% of home purchases nationwide, the competition can be fierce. An additional hurdle are the ever-increasing down payments that these same consumers need to save as a result of rising home prices. It’s no wonder the median age of first-time buyers has climbed to an all-time high of 38. Shifting Trends Co-ownership and multigenerational living have emerged as practical responses to these affordability pressures. By pooling resources, families can address high down payments while also meeting broader needs, such as elder care or support for younger generations. Nationally, 17% of households now consist of multiple generations—a record high. This shift may influence demand for homes designed with flexible layouts or in-law suites, offering a blend of adaptability and practicality. Post-Election Surge Shifting demographics and affordability challenges weren’t the only factors shaping the market in 2024. The lead-up to the presidential election also influenced buyer behavior, with many pausing their searches amid uncertainty, creating a brief lull in market activity. However, once November 5th passed, these hesitant buyers returned to the market en masse. The surge was remarkable – bidding wars in November and December reached levels of intensity reminiscent of the frenzied post-Covid spring markets, with multiple offers becoming standard once again. This post-election renaissance demonstrated that underlying demand remains strong and we’re likely to witness an unprecedented wave of buyers entering the market in the next few weeks. As 2025 unfolds, we may also see more sellers entering the market. The burdensome reality of property taxes, utility bills, and maintenance costs may outweigh the allure of low-interest mortgages for homeowners who have been delaying their desire to downsize. Eventually, the five-bedroom home that was the perfect size for a large family no longer makes sense now that the kids have graduated from college. This tantalizing possibility won’t be apparent until the market is in full swing. Until then we can only hope. Advice for Buyers Regardless of current inventory levels, my advice to buyers remains simple: start now. While property values are high, they’re unlikely to drop. Yes, interest rates are elevated, but they won’t stay that way forever—you can refinance down the line. While your first home might not be your dream home, getting started is the most important step. The sooner you begin building equity, the better positioned you’ll be for future financial success. Think of it like Josh Allen’s rise to stardom: it took grit, determination, and perseverance. Starting your homeownership journey now sets you on the path to achieving your goals, just like our quarterback’s relentless drive ensures that this is the year that Buffalo will, undoubtedly, enjoy a Super Bowl victory. Go Bills! If you’re thinking about entering this spring’s real estate market and have questions, feel free to give me a call at 330-8750. Thanks! |