Would you bet on Buffalo, NY?

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Would you bet on Buffalo, NY?

Sydney, New South Wales · Member since 2017 · 4 posts · 1 vote

I am analysing the Buffalo, NY market and would like your opinion on whether you think it is an attractive market or not - and why!

The facts are:

Annual forecasted % change from 2017-21:

GDP 1.6%
Employment 0.4%
Unemployment rate (% of workforce) 4.9%
Household disposable income 1.0%
Population 0.0%

To me those projections aren’t the most attractive compared to (1) other individual markets in the US, or (2) the US national average as a whole.

I see Buffalo’s biggest strength to be affordable housing, but I am concerned about (1) its dependency on traditional manufacturing, as other booming areas have moved into tech and services, as well as (2) the ageing population combined with 0% growth until 2021.

Initiatives aiming to grow the city appears to be (1) Buffalo Billion (subsidies to e.g. Solar City) and (2) the major expansion of the University of Buffalo’s medical school.

What do you think of this case? What are Buffalo’s strengths, weaknesses, threats, and opportunities?

/Emil

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Matthew Irish-JonesBusiness Member

Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes

8y

I bet on Buffalo NY back in 2011 and it was the best thing I could have done for myself. Granted I am from Buffalo so I wasn't even looking at other markets but, I am sure glad I did.

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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
8y
@Kyle A. That is an interesting perspective. I think I would have agreed with you in the early 90's or even early 2000's but, what I am seeing this time is different.
We are still seeing all kinds of deals in South Buffalo, West Side, Cheektowaga, etc... that all have high rates of return. We are also working with investors from across the country that are choosing Buffalo specifically because of the home prices and cash on cash return.
Although a property in South Buffalo may have appreciated from 80K to 125K in 4 years with no major work done, investors are still finding they can purchase for 10K over asking and still have positive cash flow.
As for the economy part, that is something that worried me in the beginning but, I quickly got over it when I saw how quickly units were renting. Our vacancy rate is basically 0 and for units that are not filled it is far more often due to a place needing rehab than it is for a place not renting because of a high rental amount. Most of our high rent units rent the fastest. We are seeing an incredible demand for quality rental properties.
Although the population is not technically growing a lot of millennials are moving into the city permanently so the city population is actually growing.
I can tell you we also are still buying cash flow positive properties. We have added three more this year.
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
8y
@Eric Delcol I bought a property in the Elmwood village in 2011, it is not worth over $300,000. I have had to do some up keep to the property but, in general I have made no major improvements and the property has more than doubled.
The South, North, Elmwood Village and even the West side have seen major appreciation in the last 7-9 years.
I think you are mistaken on the appreciation factor.
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Eric Delcol
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
8y
@Mathhew Irish-Jones

Congrats! That's a nice return.

Good point.

I'll be the first to say that there will be pockets of Buffalo (or any city) that will appreciate despite the larger metro as a whole not seeing appreciation.

You know the city better than I, but I feel we can both agree that Elmwood is one of the nicer areas of town and as a result can expect appreciation.

My point to the original post is that metro Buffalo, on average, will show less appreciation compared to say Charlotte,NC (I just picked a random city that's been growing).

Since 2000
Buffalos population has declined 20%
Charlottes population has increased 70%

Asides from capital improvements demand is the biggest factor in appreciation and if there's more folks to fuel that demand then you can expect more appreciation.

Originally posted by @Matthew Irish-Jones:

@Eric Delcol I bought a property in the Elmwood village in 2011, it is not worth over $300,000. I have had to do some up keep to the property but, in general I have made no major improvements and the property has more than doubled.
The South, North, Elmwood Village and even the West side have seen major appreciation in the last 7-9 years.
I think you are mistaken on the appreciation factor.
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John Moorhouse
Buffalo, NY · Member since 2017 · 64 posts · 85 votes
7y
@Eric James undesirable land, Along with crime rate
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