March 13, 2018
Home Prices Rise in Inventory-strapped Lehigh Valley Market
The Greater Lehigh Valley REALTORS® (GLVR) reported February data showed the Lehigh Valley following national market trends for residential real estate, including lack of abundant inventory, steadily upward movement of home prices, and year-over-year declines in home sales.
Click HERE to view the full Market Update report for February 2018.
“Sales declines are a natural result of there being fewer homes for sale, but higher prices often indicate higher demand leading to competitive bidding,” said GLVR CEO Justin Porembo. “The Lehigh Valley is poised for increased supply, especially as we head into the spring market, so there is hope that more sellers will take advantage of what appears to be a ready and willing buyer base.”
In February, prices continued to gain traction, with the Median Sales Price increasing 2.9 percent to $175,000. Pending Sales were up 1.1 percent to 646. Closed Sales saw a drop of 6.7 percent to 421.
Inventory levels shrank 30.1 percent to 1,497 units, leading to a Months Supply of Inventory that dropped 34.4 percent to 2.1 months. Days on Market was down 23.8 percent to 48 days.
“For those who have their minds made up to buy a home in 2018, it will likely be a competitive ride,” said Sean LaSalle, 2018 President of GLVR. “As Justin said, the trend has widely been toward fewer days on market and fewer months of supply, indicating strong demand despite higher prices and low inventory. This could prove tricky for first-time home buyers, especially for those who are impacted by student loan debt, content to rent or among the more than 15 percent of adult children still living at home.”
On this note, prevailing mortgage rates in February continued to rise. This has a notable impact on housing affordability and can leave consumers choosing between higher payments or lower-priced homes. According to the Mortgage Bankers Association, the average rate for 30-year fixed-rate mortgages with a 20 percent down payment that qualify for backing by Fannie Mae and Freddie Mac rose to its highest level since January 2014. A 4.5 or 4.6 percent rate might not seem high to those with extensive real estate experience, but it is newly high for many potential first-time home buyers. Upward rate pressure is likely to continue as long as the economy fares well.
That said, LaSalle is thinking positive. “Even with an uptick in mortgage rates, now is an excellent time to buy a home,” he said. “First-time homebuyers shouldn’t wait, especially when we know interest rates and home values will continue to rise.”
In Carbon County, the Median Sales Price increased to $120,000. Inventory levels shrank 9.1 percent to 291 units. Months Supply of Inventory was down 22.1 percent to 5.3 months. However, Pending Sales climbed to 53, versus 35 the previous February, and there was an increase in New Listings, which hit 67.