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The market for high-end homes remains weak

Rochester Business Journal
April 13, 2012

The high-end real estate market in the Rochester area remains soft despite an apparent uptick in the economy, real estate agents here say.
 
Richard Sarkis, associate broker for Nothnagle Realtors, who defines high-end homes in the Rochester area as those priced at $300,000 or more, said the demand for such homes has trended downward over the past few years as the economy has struggled.
 
"There has definitely been a decrease in values for high-end homes," Sarkis said. "We are seeing some stabilization now that the economy is getting a little better. Even so, I think we're going to see that marketplace stay flat going forward."
 
Michael Haymes, partner at Re/Max Realty Group Inc., said his definition of a high-end home tends more toward the $500,000-and-up range. Still, the economy has had a big impact on the high-end market locally, he said.
 
"The market is not on the rise, but number of listings is," he said.  "A lot of homes in luxury neighborhoods are for sale and just sitting there. The economy has to be strong here to have the people who are going to buy these homes or have people willing to trade up in the market."
 
Still, there appear to be some buyers in the market for high-end homes-depending on what part of town those homes are in.
 
The Rochester Business Journal's recent list of most expensive homes sold in Monroe County ranked the top 25 sale prices in 2011, ranging from $625,000 to more than $1.3 million.
 
Each of the 25 most expensive homes sold in Monroe County last year was in one of three towns: Five were in Webster, three in Brighton and 17 in Pittsford.
 
Recent numbers from the multiple listing service showed that the majority of homes for sale at $300,000 or more are on the east side of Monroe County.
 
As of early April, Pittsford had more than 120 homes listed for sale at more than $300,000-more than any other community. Both Perinton and Webster had more than 60 homes, while Victor and Canandaigua each had more than 50. The city of Rochester had nearly 20 homes listed for $300,000 or more.
 
The five priciest homes sold in 2011 in Monroe and Ontario counties were in Canandaigua and Naples. They ranged from $3.35 million to $1.5 million, the RBJ's list of most expensive homes sold in Ontario County shows.
 
Julie Forney, an associate broker for Nothnagle Realtors, said school districts and resale value, which is largely affected by schools, typically play the biggest role in a buyer's willingness to invest in a higher-priced home.
 
"There's a big demand for the Brighton and Pittsford school districts," said Forney. "A lot of the buyers we get with kids are looking at towns like those because of their schools."
 
Haymes said homes on the east side of Rochester in towns such as Pittsford, Brighton, Penfield and Mendon traditionally have demanded more money. However, he said, a town like Greece has seen more homes for sale in the $300,000-plus range.
 
Another factor contributing to the softness in the high-end market could be greater interest among empty nesters in moving into the city.
 
"There is a growing trend in Rochester where there is an increasing number of condominiums or townhomes like the Capron Street Lofts or in neighborhoods like Grove Place," Haymes said. "People are scaling down from larger homes to an easier lifestyle."
 
Sarkis said the trend of empty nesters moving into the city is something he does not see changing anytime soon.
 
"People want convenience, not maintenance," he said. "They want to be near the arts. Urban living is on the rise. I see that continuing."
 
Still, both Sarkis and Haymes said the situation largely comes back to the economy. As the economy gets stronger, so does the real estate market.
 
"If the economy improves, like it looks like it is, we could see more people absorbing the number of homes in that high-end market," Haymes said.
 
When it comes to the amount of interest in high-end homes, sometimes it comes down to simple math.
 
"If you're selling a home for $80,000, you might have 50 people interested in it," Nothnagle Realtors' Sarkis said. "But the higher the price, the fewer number of people that are going to be interested in buying it. That's the way it always is."
 
The economy's slight turnaround thus far does not seem to have affected Rochester's overall real estate market in terms of sales.
 
The 2011 Real Estate Activity Report from the Greater Rochester Association of Realtors Inc. shows that the number of homes listed for sale and annual closings for existing homes during 2011 were each down 10 percent from the previous year. Meanwhile, the median sale price was virtually unchanged.

4/13/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.
 


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