February 13, 2020

Tight Housing Inventory Constrains Buyer Activity

The Greater Lehigh Valley REALTORS® (GLVR) reported January data showed tight inventory continuing to constrain buyer activity, with new construction still below levels required to fully supply the market’s needs.

GLVR Members: Click HERE to view the full Market Update report for January 2020.

The Lehigh Valley housing market leans heavily toward a seller’s market. The Months Supply of Inventory for Lehigh and Northampton counties in January came in at just 1.6 months, beating December’s one-month record for lowest Months Supply of Inventory since GLVR began tracking statistical housing data in 1996.

In a housing market balanced between buyers and sellers, the Months Supply of Inventory is between six and seven months, according to the National Association of REALTORS®. This means that at January’s sales pace, it would take 1.6 months to sell all the homes on the market in the Lehigh Valley.

Over the next year, Lawrence Yun, Chief Economist for the National Association of REALTORS®, expects new-home construction market sales to increase 10 percent.

“We’re optimistic and locally can see the growth in new-home construction,” said GLVR CEO Justin Porembo. “However, we would like to see home builders bring more affordable units to the market to help ease shortages and slow price gains in that segment.”

Despite the squeeze on inventory, the 2020 housing market has a hopeful outlook.

“We’re starting off the year with continued low interest rates, low unemployment, and rising rents nationally,” said GLVR President Jack Gross. “These factors should encourage healthy buyer demand and sets us up for a strong start to the 2020 housing market and a lot of optimism for the coming spring market.”

Notable Market Stats for January

Closed Sales decreased 4.7 percent to 446. Prices stayed steady, mirroring the previous January’s price of $185,000. Sellers were encouraged with the Percentage of List Price Received increasing 0.7 percent to 97.4 percent. Days on Market remained fast at 40 days.

New Listings decreased 20.8 percent to 644. Pending Sales were up 15.0 percent to 613. Inventory levels shrank 34.8 percent to 1,138 units, leading to a Months Supply of Inventory that was down 36.0 percent to 1.6 months.

In Carbon County, the Median Sales Price remained fairly steady, decreasing just 0.2 percent to $122,750. Closed Sales were up to 50. Pending Sales climbed to 76. There was a dip in New Listings, which came in at 67, and Inventory dropped to 237 units, leading to a Months Supply of Inventory of 3.5 months.