Home prices shooting up in Ithaca area; makes home-buying challenging

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As Ithaca adds residents and jobs, in some ways it is also the victim of its own success, especially in the housing market.

Ithaca's well-performing economy and the city’s increasing population contrasts with decreasing populations in other upstate cities.

While many cities were significantly affected by the foreclosure crisis, Ithaca actually had increasing housing costs and lenders continued to lend money.

The average price of homes in the Ithaca City School District increased from about $120,000 in 1999 to close to $275,000 in 2017. The average price of a home outside the school district increased from about $105,000 in 1999 to about $195,000 in 2017.

The median household income, which increased from $21,441 in 2000 to about $30,500 in 2016, is not keeping pace with the cost of housing in both Ithaca and within ICSD outside the city.

“Prices (for houses) are quite high relative to income,” said Delia Yarrow, director of lending for Ithaca Neighborhood Housing Services. “Prices are shooting up, especially in the Ithaca City School District, and also around Tompkins County.”

The number of house sales under $165,000 has decreased from 120 sales in Ithaca in January 2000 to less than 20 sales in January 2017.

The number of house sales under $165,000 in the Ithaca City School District but outside the city has decreased from over 160 to less than 40 sales in the same time frame. Outside the Ithaca City School District, there were about 180 sales in January 2000 and about 90 sales in January 2017.

Prior to purchases in the Ithaca area, houses often get bid up relative to their asking price. There often are multiple offers on the same property.

“If there are multiple bids, there is little room to ask for repairs,” Yarrow said. “Prospective homebuyers can rarely negotiate a repair on a house with multiple bids.”

As to whether a newcomer's dream of buying a house in the Ithaca area is attainable, Yarrow said it depends on their circumstances.

"It's getting harder because there are more conditions and people are getting outbid," Yarrow said.

Some of the more popular locations where people tend to buy houses within the county are Ithaca, Trumansburg and Dryden in part because of their school districts, but because there are many houses that now cost over $200,000, a number of people are now looking for homes in different areas so that they can make their housing dreams reality.

Those without children and those who are more flexible are buying houses in Groton, which still has high tax rates, but low home values, Yarrow said.

While there can be challenges, when compared to several coastal metros, Ithaca is better off.

"If housing is out of reach for the average wage earner, that's hard to tell," said Ellen Morris-Knower, before making a comparison of how housing is more expensive in Washington, D.C. and Boston. "Compared to housing there, here it's much more affordable. Ithaca may have housing that is more expensive than Rochester and Buffalo, but it's not as expensive as Albany and certainly not as expensive as Westchester."

However, Morris-Knower also acknowledged there are challenges such as the greater availability of older housing options compared to new housing.

"Buyers don't always have the ability or time to fix things," Morris-Knower said.

The rising costs of college education also makes homebuying more difficult for young residents.

"Younger people have educational debt and school debt that puts a hamper on their budget," Morris-Knower said.

Despite these challenges, Morris-Knower said homeownership is a realistic dream for people who are moving to Ithaca.

"I'm working with success stories," Morris-Knower said. "What I love about Ithaca is the variety of housing in Ithaca. There are urban , suburban and rural areas all within a short distance of each other. It's not just urban areas or suburban neighborhoods."

Although it can be challenging buying a house in the Ithaca area, there are several resources for assistance, Yarrow said.

The First Home Club, a grant program in New York and New Jersey provides down payment and/or closing cost assistance to first time homebuyers who meet income and eligibility guidelines. The program provides $4 in matching funds for each dollar saved in a savings account, up to $7,500.

Ithaca Neighborhood Housing Services helps both those with low-incomes and middle-incomes by assisting them with a regional assistance loan that provides a maximum of 20 percent for a down payment and closing costs.

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