Summer’s temperature sizzles but the residential real estate market in the Greater Lehigh Valley runs warm or cool – depending on the locale.
The Poconos, for example, saw a 20.7 percent jump in sales in June when compared to last June, while Berks County also saw an increase in activity. But the Lehigh Valley itself saw a 9.3 percent dip in sales during the same period.
All told, the Greater Lehigh Valley saw flat home sales in June, with a slight dip of 1.5 percent (or 22 houses) when compared to June 2013.
“I am an optimist but I am also a realist,” said Lori Guthier, real estate agent with Coldwell-Banker Select Professionals, Wyomissing. “I definitely think the market is going to continue to be in recovery.”
Sales volume in Berks County picked up 4.5 percent, jumping from 354 homes sold in June 2013 to 370 this June. The days that properties remained on the market also fell from 119 days in June 2013 to 99 days last month.
“This year, the market has been steady,” Guthier said. “Interest rates are still wonderful for buyers. I do think it’s going to continue to improve.
“For the last year and this year, I have seen a steady improvement in both sales and transactions for buyers and sellers.”
According to Guthier, inventory dropped from 14 to 15 houses per buyer to eight to nine – and prices inched upward.
“People’s houses are appreciating, finally,” she said. “We don’t see the depreciation like there was for years. The values of the homes were starting to stabilize, and you will see a gradual increase in values of homes.”
In the Lehigh Valley itself, average and median sales prices rose even though 64 fewer homes were sold this June when compared to last June.
“We have come off what is really seven years of decline, and as we rounded off the end of 2013, I felt a leveling,” said Clay Mitman, owner of Prudential Paul Ford Realtors, Easton. “This year has been so encouraging because now you see people buying again. You see much more consumer confidence in the marketplace, and we’re starting to see prices strengthen.”
Mitman said he is seeing more new construction than he’s seen in years and a more prudent buyer.
“There still is a good supply of homes, but not necessarily a huge supply of high-quality homes,” he said. “I see more buyers who are buying on one income versus two.
“They are buying what they need. They are being practical. They are being very reasonable on what they want their payments to be because I think everybody knows someone who has gone through a bankruptcy or a short sale or foreclosure.”
In Warren County, N.J., home sales dropped 9 percent when comparing June 2014 to last June.
“We are slower than we were last year,” said Ravi Romano, co-owner of Re/Max Ridge Real Estate in Washington Township. “We’re seeing a little bit less demand for housing than we did last year.”
Romano attributed the lower demand in part to young families wanting to stay closer to their jobs in New York City and other factors.
“We are holding our own and we are staying active and selling a lot of homes,” he said. “But it’s not as easy this year. I think that the middle class is less of a middle class.
“Unless you are selling high-end properties, your demand by the very nature of the national economy is going to go down. It’s a direct correlation to basically the relative hardship that the middle class is suffering right now.”
Uncertainties modestly affected Carbon County. The residential market saw a small drop in homes sold this June, but the average sales price during that period rose from $101,889 to $136,032.
“Hopefully, we’re starting to see a recovery,” said Ann Velopolcek, real estate agent with Kohler-Marvin Realty, Lehighton. “We know it has been happening around the country in some of the more urban areas, so we are always lagging behind a little bit in everything, going down, going up.
“Hopefully, this is the beginning of some sort of recovery for us. We have nice homes for sale and prices are low. Interest rates are low.”
Velopolcek said she expects a higher level of activity to result in increased sales volume and inventory.
“I think we have hit the bottom of the market,” she said. “People recognize that fact. Interest rates are still low, so people who are sitting on the sidelines are jumping in now. We are seeing investors buying and also new buyers and first-time homebuyers.” NUMBERS UP, FORECAST NOT
In the Poconos, home sales in June jumped from 174 last year to 210 this year. Yet, one agent expects a slow recovery.
“It was a brutal winter, and we are still trying to recover from it,” said Kris Leshanski, associate broker with Park Avenue Realtors Inc. in Stroudsburg. “We thought [prices] had bottomed out last year but now we are not so sure.
“We saw an upsurge last year. It had been dormant for four years. Then we really saw it moving last year. We don’t see that same movement now.”
Average sale prices fell 10.1 percent, from $143,456 to $129,030, comparing June 2013 to this June.
Leshanski said she expects a continued slow market in large part a result of the lack of affordability caused by high real estate taxes.
“People still are buying, but we don’t see it as much as even last year,” she said. “We are hopeful. Interest rates are great.
“It’s not like we see one big thing except the taxes. People can’t afford to buy because even if they spend a little, $50,000, they may have $6- or $7,000 a year in taxes.”
Property taxes also represent a hardship facing the residential housing industry in Schuylkill County, where home sales inched up from 56 last June to 60 last month.
“The first six months of the year, the number of residential sales was down 5 percent,” said Kent Hatter, broker with Re/Max Five Star Realty, Orwigsburg. “There were 371 sales. Back in ’07, there were 552 sales in the first six months. We are over 30 percent off the high. For the last two or three [years], we have been holding right around this number of sales.”
According to Hatter, despite the low interest rate, many potential buyers can’t qualify for mortgages because of credit issues or too much debt.
“People’s wages are staying the same and all the other costs of life are going up from energy costs to durable goods to food, gasoline,” he said. “It’s not good for housing. Our market is still down. We are just in a holding pattern as far as values are going.”
Hatter said he expects the remainder of 2014 to mirror the first half and end with slightly lower sales than 2013.