The housing industry is back to the level it was at before the recession began in 2008, according to builders, real estate agents and lenders who Friday released 2013 year-end and fourth-quarter statistics.
“Our president says things are pretty much back to normal,” said Rick Herman, executive vice president of Rochester Home Builders’ Association in Henrietta, which released the figures of the Genesee Region Real Estate Information Services, a subsidiary of the Greater Rochester Association of Realtors.
Herman said the housing industry is optimistic about 2014 after facing a slowdown in the second half of 2013.
Although the fourth quarter was “not as aggressive as we thought it might be, our numbers are just about even to what they were last year,” Herman said. “All in all, the building season was a little flat after a robust start at the beginning of 2014.”
He said the market was affected in the final quarter of 2013 by interest rate hikes and the government shutdown in October, plus an early snowstorm in late November, which stalled builders planning new construction.
Herman said there are a number of multi-family homes under construction around the Greater Rochester area, however most of those building permits were obtained in prior years and not reflected in the 2013 figures.
The total number of building permits issued for single-family homes in 2013 in Monroe County was 711, compared to 846 in 2012. For multi-family homes, the drop was more significant, from 52 permits issued in 2013, compared to 192 in 2012.
Herman said there was a slight spike in the city of Rochester, but that most of the growth has been outside of Monroe County.
In Ontario County, 348 building permits were issued for single-family homes in 2013, up from 254 in 2012 — or 37 percent, however there were no multi-family building permits issued last year, compared with 124 in 2012.
Herman said most of the growth is in Farmington where there is a lot of land available, coupled with low Ontario County taxes and good school districts in the towns of Farmington and Victor.
“Farmington’s been a hot little area,” Herman said, noting the growth has been in a variety of products from empty nesters, to first-time homebuyers and others looking to move up.
Within Monroe County, Herman said there is still some growth in Perinton and Penfield, but Brighton and Irondequoit “are fairly built out.” He said there is more remodeling going on in the latter two communities.
Herman said more and more remodelers are getting involved in the association as more builders get involved in remodeling.
“Our association has diversified over the last five years and we have become a home builders and remodeler’s conduit for the members and the community,” he said, noting the association represents a number of home improvement and remodeling contractors.
“We’ve seen a tremendous spike in home improvements” Herman said. As an example, he said people who have wanted to redo their bathrooms are moving ahead while others are working on things like siding to make their homes more attractive for selling.
The fourth quarter also reflected an increase in interest rates, from about 4.4 percent for a 30-year mortgage in the third quarter of 2013 to just below 4.625 percent in December.
Jim Condello, past president of the Mortgage Bankers’ Association of the Genesee Region, said the increase followed comments by the Federal Reserve in December that it will reduce its purchases of Treasuries and mortgage-backed securities by $10 billion a month beginning this month.
He said interest rates are up a full percentage point from the record lows of August 2011 when they were in the mid 3s. He said interest rates are expected to be around 5.5 percent by the end of the year and the MBA is forecasting a 4 percent increase in new and existing home sales with refinance transactions continuing to decline significantly.
Andy Burke, executive vice president of the Greater Rochester Association of Realtors, said the changing interest rates are what may finally get people to make decisions about selling their homes or buying a new home.
He said people who have been reluctant to downsize may make that move in 2014 while those thinking of upsizing may also enter the market.
“The interest rate will be a major factor,” Burke said.
Jim Yockel, CEO of the Greater Rochester Association of Realtors, expects property value rates will increase so that homeowners who have been underwater will break even. That may also increase home sales.
Yockel said the momentum for the three earlier quarters of 2013 were offset by a sluggish fourth quarter, but that the year ended with solid gains overall. He said the Greater Rochester Multiple Listing Service saw a 4.7 percent increase in the number of homes, condominiums and townhouses sold to 11,267 units, compared to 10,765 in 2012. Pending sales also grew by 4.1 percent year over year to 11,350, up from 10.904 in 2012.
Areas homes also continued to gain value, indicated by a modest 1.8 percent climb to $127,000 overall, Yockel said, noting median home prices in the city of Rochester posted a 5.3 percent gain to $78,900.
He said Wyoming and Steuben counties outpaced the norm, reporting sales increases of 21.1 percent and 16.7 percent, respectively.
Inventory has dropped, however, with the number of homes for sale declining 10 percent from 2012 to 2013 throughout the 11-county region. New listings for the same time period are about even at 3,443 in 2013, down slightly from 3,456 in 2012.