Your next property investment may be waiting for you in the Western New York real estate market. The Buffalo real estate market has got some serious investment opportunities that you do not want to miss out on. Let’s take a quick look at Mashvisor’s forecast for this housing market, then talk more in-depth about key trends we’re seeing in Buffalo, NY.
Buffalo Housing Market 2019
- Median Property Price: $190,317
- Price per Square Foot: $100
- Price to Rent Ratio: 15
- Average Days on Market: 50
- Monthly Traditional Rental Income: $1,032
- Traditional Cash on Cash Return: 1.9%
- Monthly Airbnb Rental Income: $2,190
- Airbnb Cash on Cash Return: 5.8%
- Airbnb Occupancy Rate: 57%
The above data is provided by Mashvisor’s investment property calculator. What does it tell us about Buffalo real estate? Well, by taking a look at the median property price (which means half the properties in the market are priced above this and half are priced below), we can see that Buffalo is one of the more affordable cities in New York. The return on investment metrics tell us that rental properties in Buffalo are profitable. Yes, the average cash on cash return for Airbnb is higher than the traditional, but once you start searching on the neighborhood level, you’ll definitely find better-performing Buffalo real estate properties.
Related: How to Find a Profitable Investment Property for Sale: Our Guide
Now let’s get into some key Buffalo real estate market trends to better understand how it’s looking on a bigger scale.
Buffalo Real Estate Market Trends
The Rise in Home Prices Is Slowing Down
When a housing market starts to heat up, home values increase and selling prices follow. According to Zillow, Buffalo real estate currently holds a median home value of $86,000. This number went up 9.7 percent since last year, and as it’s a warm market (leaning towards a seller’s market), Buffalo real estate values are projected to go up another 2.6 percent by 2020.
The median selling price for Buffalo real estate went up 5.4 percent from last year, reaching a record-high of $168,000 in July. This annual rise in home prices isn’t the fastest and largest that Buffalo real estate has seen, but it’s still considered one of its strongest years (third-fastest pace in 20 years).
We can’t talk about Buffalo house prices without talking about their general affordability. Seeing as it is considered to be a very affordable real estate market, especially when compared to other cities in New York, a rise in home prices isn’t even that bad. This summer was a hot one, and we aren’t just talking about the weather. The Buffalo real estate market was red hot with buyers fighting for any home that hit the market. The strong buyer demand for houses for sale in Buffalo has obviously sent prices soaring and helped push values up. But now as the market regains some balance and goes back to its normal growth pace, we can see why real estate is cheap in Buffalo. A slowly growing economy and low mortgage rates also help keep Buffalo real estate affordable.
Low Inventory But Healthy Home Sales
Based on everything you’ve read so far, you can assume that housing inventory isn’t the highest it’s been, and it isn’t. Homes for sale are in short supply and if you want to invest in Buffalo real estate, we recommend you start searching now before inventory levels drop.
The number of homes for sale in the Buffalo real estate market dropped by 4.5 percent last month. Inventory levels are at their lowest in 20 years, and with buyer demand still present, a high level of home sales is expected. On average, about 1000 homes have been selling every month for the past two and a half years in the Buffalo housing market. Home sales have slowed down and dropped 3.6 percent over the past year. The average selling price last month was $165,000 (which is an annual increase of 5.1 percent). Although buyer demand has slowed down, homes are still selling at a healthy pace. Typically, homes in the Buffalo real estate market receive one offer and can sell for 1 percent above list price (hot homes sell for 7 percent above list price).
Related: Searching for Property in a Low-Inventory Real Estate Market: 6 Tips
One of the Strongest Airbnb Markets
Buffalo real estate investors should seriously consider a short-term rental strategy. Airbnb has been steadily growing in all parts of the country, including Buffalo, NY. But before you get excited about the potential returns, you need to ask yourself one question: Is Airbnb legal in Buffalo?
Yes, it is. But there are some newly proposed regulations. The Buffalo Common Council and Amherst Town Board have been working together over the previous months to come up with a fair set of regulations for short-term rentals in their communities. The main purpose of the regulations is to ensure the safety of guests when they visit Buffalo and book their stays through the popular home-sharing app.
So now, what are the Airbnb laws in Buffalo? The main gist of the new rules is that Airbnb Buffalo hosts need to register with the city paying some fees and make sure their short-term rental properties are up to the safety and health codes.
So before making a Buffalo real estate investment in Airbnb, make sure you’re aware of the city’s regulations. Hosts need to pay a fee of $250 upon registering their homes. If this is going to be a non-owner occupied property (not a primary residence, but fully operates as a short-term rental business), you need to pay a $500 registration fee. Your license needs to be renewed every year, with homeowners paying an additional $75 fee, and real estate investors paying $150.
Related: 4 Airbnb Industry Trends You Need to Know Before Getting Started
The 5 Best Buffalo Neighborhoods for High ROI
Using Mashvisor’s data, we’ll now tell you where to invest in Buffalo real estate for a great ROI on your rental property.
Black Rock
- Median Property Price: $77,500
- Price per Square Foot: $53
- Monthly Traditional Rental Income: $955
- Traditional Cash on Cash Return: 5.7%
- Monthly Airbnb Rental Income: $4,582
- Airbnb Cash on Cash Return: 34.5%
- Airbnb Occupancy Rate: 59%
Schiller Park
- Median Property Price: $97,500
- Price per Square Foot: $37
- Monthly Traditional Rental Income: $867
- Traditional Cash on Cash Return: 3.2%
- Monthly Airbnb Rental Income: $3,626
- Airbnb Cash on Cash Return: 30.8%
- Airbnb Occupancy Rate: 51%
Kingsley
- Median Property Price: $90,925
- Price per Square Foot: $43
- Monthly Traditional Rental Income: $900
- Traditional Cash on Cash Return: 4.8%
- Monthly Airbnb Rental Income: $2,022
- Airbnb Cash on Cash Return: 22.2%
- Airbnb Occupancy Rate: 55%
LaSalle
- Median Property Price: $88,363
- Price per Square Foot: $53
- Monthly Traditional Rental Income: $948
- Traditional Cash on Cash Return: 4.6%
- Monthly Airbnb Rental Income: $2,067
- Airbnb Cash on Cash Return: 15.8%
- Airbnb Occupancy Rate: 57%
South Park
- Median Property Price: $79,200
- Price per Square Foot: $47
- Monthly Traditional Rental Income: $1,050
- Traditional Cash on Cash Return: 6.1%
- Monthly Airbnb Rental Income: $1,488
- Airbnb Cash on Cash Return: 7.9%
- Airbnb Occupancy Rate: 52%
If you want to start searching for Buffalo investment property in the neighborhoods mentioned and others, set up a free account with Mashvisor. You can use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes whether you’re looking for singles family homes, condos, multi family homes for sale in Buffalo, or any other type of property. You don’t want to miss out on those return rates! They aren’t numbers you’ll find in any other real estate market.
If you are looking for a hot location to invest in real estate, check out our real estate market reports!