Buffalo, New York has topped Zillow’s annual list of the hottest housing markets for 2024, charging ahead of last year’s frontrunners like Charlotte, NC and Tampa, FL. Zillow’s economists predict Buffalo’s housing market will heat up this year due to high demand and low inventory driving competition among buyers.
Surging Demand Driving Up Prices
According to Zillow’s 2024 forecast, home prices in Buffalo are predicted to rise 12.8% this year, after already jumping 12% over the past year. This growth massively outpaces the national average and previous years. Buffalo’s median home price hit $265,000 at the end of 2022, up from $150,000 just five years ago.
Driving this surge is a wave of eager buyers flocking to Buffalo’s housing market, met by a sparse number of homes for sale. Mortgage rates are expected to drop in 2024, combined with rising rents, the appeal of homeownership grows stronger. Approximately 5,000 single family homes are projected to be sold this year in Buffalo, 500 more than last year.
Affordability Cements Appeal
Despite rapid growth, Buffalo home prices remain relatively affordable compared to other cities, especially those nearby like Rochester and Syracuse. The median home in Buffalo costs around $159 per square foot – $100 less per square foot than Rochester.
| City | Median Home Price | Median Rent |
|---|---|---|
| Buffalo | $265,000 | $1,495 |
| Rochester | $290,000 | $1,650 |
| Syracuse | $220,000 | $1,300 |
Buffalo’s lower cost of living and housing, paired with its charming neighborhoods and growing job market entice new residents.
Jobs Power the Housing Boom
The key force underlying Buffalo’s ascent is a thriving job market drawing new residents. Major investments from companies like Tesla, IBM, and M&T Bank, along with a burgeoning tech sector are creating new high-paying jobs.
Buffalo’s unemployment rate dropped to 3.4% at the end of 2022. These new residents need homes, further fueling demand. Zillow expects strong job growth to continue propelling the market even higher through 2024.
Ripple Effects Across Western NY
Buffalo’s hot housing market also fans out into the surrounding towns and suburbs. Areas within commuting distance benefit from the job growth, experiencing their own housing booms.
Home values increased over 15% last year in towns like Clarence, Amherst, and Tonawanda. Inventory remains low and bidding wars are common.
Areas offering more affordability while still accessible to Buffalo jobs will likely see even larger home price and demand growth in 2024. Sentiment is these could be the Buffalo suburbs to watch this year.
What Does This Mean for Buyers and Sellers?
For buyers, Buffalo’s ultra-competitive housing market means preparing for bidding wars, market rate offers, waived contingencies and more. Homes are routinely getting 5-10 offers in the first weekend and selling over asking price.
Patience is key – it may take months to find and secure the right home. Renting may be a better short-term option while saving up a larger down payment. First-time homebuyers also face high barriers with lower inventory of starter homes.
Sellers are in the driver’s seat, able to ask over market price and still see overwhelming interest. Nearly half of Buffalo homes sell above their list price. But sellers still face the challenge of finding their next home in the same market.
Can Prices Continue Rising?
The big question is whether Buffalo home values are rising at an unsustainable pace. For now, Zillow economists predict the gains to continue through 2024. Buffalo home prices are still playing catch-up relative to other cities after stagnating for decades.
But threats exist if mortgage rates spike higher, construction ramps up dramatically, or job growth stalls. Each would dampen the fierce buyer demand enabling this boom.
For now, this old industrial city is offering new residents and investors the rare chance to buy into a transforming local economy – if they act fast enough amidst the buying frenzy. Buffalo’s housing revival reveals no signs of slowing yet.
To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.
