Two large-scale municipal bets are converging in Rochester, New York: the city is replacing a mid-century expressway loop that cut downtown off from surrounding neighborhoods, and it is overhauling its entire zoning code and map to better match how properties are actually used. The first effort has already produced visible results. The second is now before City Council. According to Mark Updegraff, broker and owner of Updegraff Group Realty in Rochester, both are beginning to change where investors look and how properties trade.
Updegraff began investing in Rochester real estate in 2008 and moved into the business full-time in 2010. Alongside the brokerage, he runs a separate property-management company, Updegraff Management. Much of his work is with investor clients, many of whom buy from out of state.
Like many mid-size American cities, Rochester built an expressway loop around its downtown core. The Inner Loop, constructed between 1952 and 1965, was designed to move suburban commuters to downtown office buildings. The infrastructure did what it was designed to do and destroyed pedestrian traffic in the process.
“When I came here to Rochester, nobody went downtown. Nobody,” Updegraff says. Businesses that tried to open bars or restaurants in the area failed because foot traffic had disappeared.
The eastern section of the loop was the first to be transformed. Work began in 2014, the new roadway was completed in December 2017, and redevelopment has continued since. That project reconnected the East Avenue and Park Avenue neighborhoods, two of Rochester’s most established residential areas, with the downtown core. New development, functioning businesses, and nightlife have followed in a zone that had been largely written off. “It’s great to go down and see it revitalized with businesses that are actually successful,” Updegraff says.
Inner Loop North, a separate project, is in engineering design. Official materials list differing provisional dates for construction. The surrounding area still holds significant underutilized stock, including old office buildings that are vacant or nearly so, which Updegraff sees as an opportunity for conversion or redevelopment.
Running on a parallel track is the city’s Zoning Alignment Project, known as ZAP. The effort grew out of Rochester 2034, the comprehensive plan the city adopted in 2019, and launched in 2020 to translate that plan into a new zoning code and map. It involved a review of the entire city zoning map, identifying parcels where the existing designation no longer matched a building’s actual use or character. In September 2026, City Council held the proposed code and map in committee, and public hearings were scheduled for October 21 and 22.
Updegraff says the city went through neighborhoods and identified old buildings, such as former small groceries and similar commercial structures, that had lost their commercial zoning under residential designations and could not operate as anything other than residential. The proposed changes would broaden the permitted uses for many of those properties. That would not automatically authorize a restaurant or bar or remove other required approvals, but it could open possibilities the current zoning blocks.
The rezoning creates a potential information gap. Many current owners may not yet realize their zoning designation could change, which means investors who compare the proposed map with available properties may identify value before the broader market adjusts. “People that are smart will start using the map overlay to go out and find properties,” Updegraff says, “because a lot of people that own these properties probably don’t even know that their zoning’s changing.”
Underneath these development efforts sits a structural supply shortage that has defined Rochester’s housing market for more than a decade. Updegraff tracks Monroe County single-family data closely. According to his analysis of MLS data, the average monthly count of active listings fell from approximately 3,832 in 2014 to 486 in 2025, a decline of about 87%.
Market activity tells a related story. Annual new listings fell from 11,984 in 2014 to 7,700 in 2025, while closed sales went from 7,061 to 6,457. As a result, the number of new listings for each closed sale declined from 1.70 to 1.19 over the period. Active listings measure how much is available at a given moment, while new listings and closed sales measure activity over the course of a year.
Prices have climbed alongside the shortage. Based on Updegraff’s calculations from the same MLS data, the average sale price for a Monroe County single-family home rose from approximately $154,000 in 2014 to $318,000 in 2025. That is growth of roughly 106%, or about 6.8% a year on a compound basis. The pace has varied. The same calculation shows annualized growth of about 2.8% from 2013 to 2019 and 9.7% from 2019 to 2024, including a jump of 14.2% in 2021. Because the figures track average sale prices, they reflect the mix of homes sold in a given year rather than changes in the value of the same properties over time.
Updegraff expects demand to stay strong. “Next spring it’s going to be the same thing. There’s going to be dozens of offers on properties,” he says. “Doesn’t matter what the interest rate is. Everybody wants to buy a house.”
For investors, the math has gotten harder. Sellers of investment properties often hold price expectations anchored to valuations from the low-interest-rate period. For multifamily properties with five or more units, which are classified as commercial, pricing is typically based on cap rates, and Updegraff sees little appetite among serious investors to pay for deals underwritten at rates that no longer exist. “Most investors aren’t coming to overpay at stuff underwritten at a 4% interest rate when rates are not 4% anymore,” he says.
Updegraff adds that cap rate calculations themselves are a source of confusion. A cap rate compares a property’s net operating income with its price or value, but sellers often present favorable numbers by adjusting assumptions about vacancy, capital expenditures, and repairs. Those variable inputs can make the same property look like a 10-cap or a 6-cap depending on who runs the numbers. He encourages buyers to understand the assumptions behind any figure they are shown.
Industry consolidation, including major brokerage mergers, has had no visible effect on how deals get done in Rochester, according to Updegraff. The local trend runs the other direction, toward smaller firms. He notes that several agents he once tried to recruit have since launched brokerages of their own.
Similarly, elevated interest rates have not produced a freeze among buyers or sellers. Sellers are making decisions driven by life circumstances rather than rates, and buyers who spent years on the sidelines are choosing to act. “A lot of people kept waiting and they’re sick of waiting,” Updegraff says. “They just want to get a house.”
AI-equipped buyers are starting to show up as well. A recent client asked whether Updegraff uses AI, requested permission to record the meeting to feed into their own AI tools, and had clearly begun experimenting with the technology. Still, the expectations Updegraff hears from buyers have not changed much. One that comes up repeatedly is $4,000 a month in cash flow from $500,000 in capital, a 9.6% annual cash return if that $500,000 is the total cash invested. Whether a property can deliver that depends on financing, operating expenses, and other cash requirements, which is a different question from its cap rate. Updegraff’s view is that buyers and agents need to align their assumptions early and then test them against actual deals.
Rochester’s housing market has followed the same pattern for more than a decade: constrained supply, rising prices, and persistent buyer demand regardless of the rate environment. The infrastructure and zoning changes now underway add a new variable. They redirect investment attention toward the urban core and toward properties whose potential uses may soon be legally recognized, and over time they could also enable new housing development, though their broader effect on supply will take years to show.
About the Expert: Mark Updegraff is Broker and Owner of Updegraff Group Realty, a real estate brokerage in Rochester, New York, and owner of Updegraff Management, a property-management company. He has invested in Rochester real estate since 2008 and has worked in the field full-time since 2010, with a focus on investor clients.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
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