It just keeps getting better.
The September real estate figures for the Greater Lehigh Valley show a robust 19.8 percent increase in home sales over September 2012, another strong month in what has been a brisk year of activity.
“This year has been absolutely the best year we have had probably in the last eight years,” said Bill Sands, broker with Sands & Company, Wyo-missing, Berks County. “It has been very robust.
“That robust activity and sales volume we experienced I feel is a direct attribute to the confidence that the market has reached bottom and has stabilized. The interest rates were still at an all-time low, so that has propagated a lot of people to feel safe to venture back into the market.”
The numbers from across the region show that 1,260 homes were sold in September, an increase of 208 homes when compared to last September. And going back two years, this year’s September numbers show a 23.4 percent jump over September 2011’s figures.
Sands sees positive signs for the market, in part because of a reduction in the number of foreclosures.
“In the past, foreclosures were very much as-is,” he said. “With the banks and investors taking back these properties, going in and doing the basic cleanup, they are getting a higher price point, which is helping to raise the bar on the value. It’s a very positive sign.”
According to Sands, other positive signs in the market include commercial lenders opening doors to business ventures and investors, including land developers.
“New construction starts are coming back on board,” he said. “They aren’t dominating the market as they have done, which is helping the resale market regain steam. Eventually, we are going to be doing that switch from more of a buyers’ market instead of a sellers’ market, but we are not quite there yet.”
In the Lehigh Valley itself, 111 more homes were sold this September over last September (a 23.5 percent jump), while the Poconos saw a whopping surge of 36.7 percent in sales.
One Lehigh Valley real estate agent sees a telling switch in her own listing inventory.
“I do have some rentals, and my rentals are actually sitting much longer than normal,” said Amanda Renaldi, real estate agent with Century 21 Pinnacle, Bethlehem. “I have a feeling that it’s because all of the short sales that were pushed through.
“My rentals usually fly off the shelf but that’s not happening. I have a feeling there is a shift at this point, and that’s definitely going to be good for sellers.”
Renaldi also sees homes selling more quickly and more competition as buyers gobble up existing inventory.
“At this point, it’s a lot more competitive,” she said. “Our listing-to-sales ratio is 95 percent. In most cases, if they are priced correctly, they will definitely sell. There are more buyers. I think we are well on our way to a seller’s market.”
For some areas, a transition to a seller’s market has begun, but the status quo remains for more rural areas such as Carbon County.
“We are so flat-lined it is really close to the same thing we were last year in terms of number of listings, the listing prices, sold-to-list ratio, the absorption rate,” said Jim Christman, associate broker with Keller Williams Real Estate, Palmerton. “It’s almost all identical. People are just unsure at this point, so you are not getting any buying frenzy even though the [interest] rates are low. People are being really cautious.”
Christman believes a subtle jump in the interest rate has contributed in part to the region’s activity and may help for future sales.
“Buyers come to expect 3½ percent, so 4½ percent sounds high when historically it’s just really good,” he said. “I just computed a payment for a buyer. It was $75,000 but the principal and interest payment was something like $340. They could rent it for way more, even with the taxes and interest added in.”
According to Christman, Keller Williams’ chairman of the board, Gary Keller, predicts a modest increase in home sales over the next two years. Carbon County is expected to follow that trend.
A foreclosure and short sale trend in the housing market over the past few years seems to be declining, according to one real estate agent in the Poconos. Of 735 pending sales in the Poconos, 174 represent foreclosures and 164 are short sales.
“Almost 46 percent of our pending [sales] are distressed sales,” said Cristina Primrose, broker with RE/MAX Results, Sciota, Monroe County. “That tells you that the market is still not healthy, but we are seeing some sales going forward that are not distressed.”
Primrose also sees more brisk activity in the vacation and second-home markets.
“That has definitely picked up,” she said. “We are seeing a lot of buyers with cash or large down-payments in the vacation market. That’s probably due to people making money on the stock market and taking it out.”
Primrose expects residential market conditions to gradually improve, going forward.
“I think we’re going to continue on the same path for a few years,” she said. “It’s going to take a little while. We still have a lot of foreclosures and distressed sales and that makes a big difference. It’s very much a cycle. We have been through it before; we will get through it again.”
In Warren County, N.J., the cycle appears to be in the up mode. Sales this September were 20.3 percent higher than in last September.
“The real estate market is improving,” said Linda Powers, broker with Burgdorff ERA, Realtors, Hope, N.J. “Since January, we see about a 6 percent increase in sales in Warren County. We see a decrease in the time on market, and our houses are selling at about 96 percent of their list price, so I’m optimistic.”
Powers sees stable prices and brisker activity in homes priced under $300,000, as well as in pending sales.
“Pending sales are strong, [there’s] probably more under contract than have sold,” she said. “Real estate in general nationwide has increased. [It’s] a combination of low interest rates, promise of employment, steady income, less debt. It’s a combination of many factors, good prices – and naturally the beauty of Warren County is what draws our buyers out here.”
The buyer pool remains relatively consistent in Schuylkill County, despite a temporary blip in early October.
“When the government shutdown was going on, things turned off,” said John “Bud” Yacobowsky, broker with Red E Realty, Pottsville, Schuylkill County. “Typically this time of the year, we start slowing down a little bit, but right now since they actually did something with the shutdown, it seems like there are some buyers that are still in the market.”
Yacobowsky sees some factors contributing to slower activity, in addition to the seasonal slowdown.
“Interest rates have gone up since summer a bit,” he said. “That could be what’s affecting the market. … Then with the confusion with the government shutdown, I think that just scared buyers and people just held off. Now we are getting into the seasonal part of it.”
Spot reassessments by Schuylkill County school districts at the time of sale also may have contributed to slower activity.
“Some of the people that bought the homes over the last few years that got reassessed are at a bit of a disadvantage compared to similar houses that weren’t reassessed,” Yacobowsky said. “People are thinking the lower tax houses. They are more particular about that than ever before. It put a damper on sales.”
Yacobowsky remains optimistic.
“As long as interest rates stay low, we will probably be OK,” he said. “It’s slowly getting better. It’s not booming. It’s getting better every year, slowly over the last two, three years, but I think it’s really interest-rate sensitive and market sensitive.”