Investing in Buffalo’s New Construction Market
Demand for housing in the Buffalo real estate market has risen sharply, leading real estate investors to look at different housing alternatives.
Part of the housing demand can be attributed to the staggering population growth that Buffalo, New York has experienced over the past decade. Census data shows that Buffalo’s population growth has surpassed other upstate New York cities.
While Buffalo’s population boom has contributed to its competitive real estate market, the pandemic sent the nation’s housing market into overdrive. Data from a regional market study found that Buffalo’s affordable housing market was the New York market most impacted by COVID-19. In January, New York Governor Kathy Hochul announced $991 million in bonds and subsidies to create or preserve more than 3,000 affordable housing units across the state. In Buffalo, that money will create 386 units.
Buffalo will receive more than $100 million to demolish and rebuild Pilgrim Village Senior, construct Pilgrim Village Family, and rehab 21 townhome buildings in McCarley Gardens Apartments while adding four more buildings.
Buffalo’s continued growth has created a need for single-family housing construction in the region. Investors who are interested in Buffalo will find plenty of opportunities to break into the market, but investors should keep two things in mind: Buffalo is a seller’s market and new construction opportunities are happening all over the city.
Buffalo is a Sellers’ Market
Surging demand and limited inventory have created a sellers’ market in Buffalo – meaning there are more buyers than there are available homes. Because of the high demand for housing, sellers can command a premium price for their homes, and in many parts of the country, homes have become overvalued compared to historical numbers. Homes in Buffalo are now selling faster than ever before, and for more money than ever before.
The median overall home price for Buffalo homes reached $205,000 in January, according to the Buffalo Niagara Association of Realtors – a 17% increase from January 2021. Buffalo homes spend about 21 days on the market, and there is only about a month’s worth of inventory.
Low mortgage rates and the pandemic have contributed to the demand. During the pandemic, tens of thousands of people have left expensive coastal cities such as New York and San Francisco, where home prices exceed twice the national median, for cities inland where prices have been lower.
Buffalo’s real estate market is booming, and it’s showing no signs of slowing down. That equals plenty of investment opportunities for investors looking to scale and purchase investment property in Buffalo, NY, especially if they’re interested in new construction. And with new construction loans for investors easier to obtain than ever, opportunity for real estate investing in the Buffalo real estate market has never looked more appealing.
New Construction Projects in Buffalo are Booming
As one of the best cities to invest in real estate, Buffalo has no shortage of new builds happening around the city, which is a great sign for investors looking for construction loans in New York.
The number of Buffalo construction permits increased 6% YOY in 2021. Overall, there were 1,551 new permits – 978 single-family permits and 573 multifamily permits – issued in 2021. Single-family permits increased 5% YOY, while multifamily permits increased 8% YOY.
In downtown Buffalo, multiple buildings are being renovated and converted into apartment buildings. The Buffalo Statler, a century-old hotel, is being transformed into a 183-room apartment building. The Richardson Olmsted Campus, a former psychiatric hospital, is being converted into a hotel, apartments, and brewery.
Silo City, a former hub of the American grain industry, has recently evolved into an unexpected home for theater, music and spoken word performance. One of the world’s largest collections of grain silos along Buffalo’s waterfront will transform into a community of hundreds of apartments, offices, retail, and gallery space this year.
Governor Hochul has made it her goal for all New Yorkers to live in affordable communities to tackle the housing crisis, and new construction homes in Buffalo, NY are a way to achieve that goal.
Why Investors Should Consider Building in Buffalo
Buffalo is sizzling, and investors are taking advantage of the market. Inventory is low and prices are rising, but opportunities are there for investors who move quickly to seize the opportunity.
If you want to move quickly, you need the right lender capable of financing New York investment property loans. Investors have several options when it comes to hard money lenders in New York, but Lima One Capital has the best suite of new construction loans for New York investors.
As experienced construction loan lenders, we’re able to move quickly when you find the right opportunity. Whether you’re interested in a construction to permanent loan, real estate investing, or new construction loans for investors, we’re here to help. Contact us today to discuss your next deal, or if you have a deal in hand, you can speed up the process by applying now.