In Erie County, lower home sales equals lower fees

Home buyers aren’t the only ones feeling the impact of rising interest rates and a low supply of homes for sale.

Now the drop in home sales activity is also hitting municipalities where it counts: the wallet.

For every real estate transaction – whether a deed for a home purchase or a mortgage – the Erie County Clerk’s Office collects a recording fee, along with a transfer tax or mortgage-recording tax. Those charges, which are based on a percentage of the transaction amount, are in turn shared and divvied up among the county’s cities, towns and villages, bolstering their coffers.

For the last few years, that has been a gift that keeps on giving, as the housing market chugged along and sale prices kept going up. So recording fees rose from $6.38 million in 2018 to a high of $7.86 million in 2021. And that doesn’t even include the mortgage and transfer taxes, which are separate.

“We’ve had really good years, because there’s more million-dollar sales the past few years than even when I became clerk in 2017,” Erie County Clerk Michael P. “Mickey” Kearns said.

But it has come to an abrupt end because there are fewer homes to buy and fewer deals closing. According to Kearns, revenue from collecting deed recording fees is down 30% from the budget expectations for the year. In turn, that plunge means sharply lower revenues for municipalities.

“I am compelled to alert Budget and Management of the dire outlook in the current real estate market,” Kearns wrote in an Aug. 21 letter to Erie County Budget Director Robert W. Keating, describing the…