Real Estate Lock-In Effect in Rochester

Due to the crisis facing the real estate market in Rochester, New York, important meetings have been held in recent months among builders, government officials, the Association of Realtors, and many housing advocates in the city to address the current crisis in the hope of developing or seeking real and sustainable solutions.

According to experts, the primary goal of this collective effort is to solve the real estate market problem on all fronts, as it is a situation that will not resolve itself. They also state that, although their work is still in the early stages of the process, they will not stop until they find the best ways to meet the current and future housing needs of the region.

The crisis in the city of Rochester is mainly due to the scarce supply of affordable housing and the constant increases in interest rates. As a result, numerous residents of western New York find themselves blocked or trapped in a real estate scenario that favors them as homeowners because the prices of their homes continue to rise and demand rises with them, but the lack of supply does not motivate them to buy a new property and agree to a new mortgage loan.

All these aspects of the current real estate market cause all people who already have housing and stable mortgage payments to find no sufficient reasons to change property or move.

The Association of Realtors, through its president, has confirmed that most Rochester residents have stated that they feel comfortable in their homes and are not anxious or in a hurry to move. This is why the government, builders, and investors are making great efforts to build new homes in the area to increase market offerings.

He also emphasized that all those “potential sellers” currently have mortgages at 3.4% or less, and there are even many who no longer have mortgages because they have fulfilled their mortgage payments or because they bought in cash some time ago.

For this reason, they have no interest whatsoever in changing property and having to acquire another loan with higher interest rates to buy a more expensive house. Therefore, the vast majority of them choose to stay and do not allow for a rotation of homes. This entire situation is what is referred to as the real estate lock-in effect.

To prevent the market from entering further crisis or remaining at a standstill, the only way to break this is by improving housing accessibility, as real estate agents have neither lists of available houses nor inventory of goods for sale, the president declared.

He also reported that the city currently has a variety of strategies and programs available to help buyers, such as grants, mortgage assistance, and others, but people do not have enough knowledge about them and do not know how they can benefit from them.

In conclusion, he states that it is very important to address the housing crisis for the economic and social well-being of Rochester and the state of New York. If the city does not have affordable housing for its inhabitants, companies will not want to invest, and future professionals will leave. Therefore, affordable housing is needed at all levels and for all types of people: young people, seniors, large or small families, etc.

Available foreclosures:

Rochester: 25 homes available.

Western New York: 40 homes available.

By Elias DaSilva | September 25, 2024