The City of Buffalo is holding its annual tax foreclosure sale, from Monday through Wednesday at the Buffalo Niagara Convention Center, and has its usual share of out-of-town bargain hunters looking to cash in on Buffalo’s low real estate prices.
But this year there is a twist, city officials estimate the inventory is the smallest in about 20 years, about half of the usual supply of tax foreclosed properties, residential, commercial, and industrial which are sold to cover unpaid property taxes and user fees.
Some observers estimate as many as 70 percent of the bidders at this year’s In rem tax auction are from out of town, especially New York City.
Martin Kennedy, Buffalo’s Commissioner of Assessment and Taxation, said Buffalo is a hot real estate market but prices are still well below the national average.
“It has been kind of low valued compared to other areas. So they see what we have here and they recognize a tremendous value in property, and that is why they are here.”
The Buffalo Erie Niagara Land Improvement Corporation, known as the Land Bank is a preferred bidder for many of the properties, meaning it gets exclusive dibs on certain lots, and this year the land bank is targeting a number of vacant lots on the West Side.
BENLIC Executive Director Jocelyn Gordon said the plan is to build six new homes on those lots, “affordable for the most part, meaning that go for market rate, they would sell between $140,000 and $150,000, and represent a nice, energy-efficient, new housing product in Buffalo.”
But make no mistake, there are some blockbuster bargains at this year’s tax sale, such as a well-kept apartment house across from Canisius College that went on the auction block to cover just $5,000 in back property taxes, and sold for $184,000.
A home in the Parkside neighborhood opened at $23,000 to cover the back taxes. It sold for $227,000.
But those surplus funds above and beyond the payment of back taxes are actually held for the original property owner in a special fund.
Erie County is one of the only counties in the state that sets aside surplus funds from a tax sale to go back to the original owner, under the Erie County Tax. The rest of New York’s municipalities keep the surplus funds from their tax sales, leaving the property owners with nothing.
The annual property tax sale wraps up Wednesday.