Home sale settlements in the Greater Lehigh Valley cooled a bit in July, except for the Poconos and Berks County.
The Poconos, in fact, saw a leap of nearly 16 percent in home sales. Meanwhile, homes sold spent fewer days on the market across the region compared to July 2013.
The overall region saw a drop in sales in July by 58 homes, a 3.8 percent decrease when compared to last July.
“Houses that are priced properly are moving quickly,” said Trish Husted, real estate agent with Coldwell Banker Hearthside Realtors, Hellertown.
The Lehigh Valley itself saw 78 fewer homes sold, falling from 734 homes sold last July to 656 sold last month. Those homes sat an average of six days shorter on the market.
“In our particular area in the Saucon Valley, there seems to be a sufficient inventory of under $200,000, but between $2- and $350,000, there is very little inventory,” Husted said. “So when something does come up when it’s in good condition, it goes quickly.”
She said she sees a lot of first-time homebuyers and people downsizing who are making those purchases.
“I am not seeing a lot of people moving up because they are afraid to make that move because of the uncertainty of the market,” she said. “This year, I feel the majority of what I am selling is $2- to $400,000, but I’m seeing more of them. The higher-priced homes I sold last year were real deals, and I think the deals are over.”
Deals in nearby Berks County remain less elusive where home sales grew slightly over a half percent comparing July 2014 to July 2013 while average days on market fell by four days.
“Average sale price interestingly enough in the month of June was up 3 percent,” said Bob Miller, principal/owner of Keller Williams Realty Elite, West Lawn. “But it looks like we are only tracking 1 to 1.5 percent up for the year thus far.
“We actually thought we would see a little bit more price in average sales prices over the period of the year because of the lower inventory levels.”
Miller said he projects a 3-to-5 percent increase in 2015 and more activity in the new construction sector.
“Our new construction seems to be picking up, and we are hopeful of going into the spring market very strong,” he said. “We have another four to five new communities going to be starting.”
Miller credited the continuing low interest rates in part for confidence in the market.
“The resale inventory continues to rise a bit,” he said. “It just seems that between Obamacare and all the other things going on in the past year, there was a lot of uncertainty. Hopefully things will settle out next year.”
Things were more than settled in the Poconos, where home sales jumped by 15.6 percent, from 180 homes last July to 208 homes sold last month. On average, those homes sold in 21 fewer days.
“[It’s] two steps forward, one step back,” said Rick Cordisco, owner/partner at Pocono Mountain Lakes Realty, Blakeslee. “That seems to be what the market’s doing right now.”
Cordisco’s market includes predominantly second homes and investment homes.
“A lot of people are buying the really, really cheap homes that have been accumulating over the last three years,” he said. “Under $60,000s are flying. Still, the most leads we get through the Internet is up to $150,000, but definitely this year as opposed to the last year, you are seeing a lot more people interested in paying cash and buying these little cabins up.”
Those cabins helped to support a higher demand for vacation rentals and provide potential for future activity.
“Rentals are huge,” Miller said. “A lot of people are buying and putting the properties on our rental program and generating an investment that way. The good thing is the people buying these little … cabins that are half falling down, four, five, six years from now they will be nice products to sell.”
Fewer homes sold in Warren County where home sales fell 6.8 percent, dropping from 118 homes sold in July 2013 to 110 last month. During that period, those homes averaged 19 fewer days on the market.
“What happened in 2013, I think a lot of the pent-up demand was satisfied,” said Darryl Malcolm, broker with Full Financial Realty, Washington. “When the new year turned around, it all dried up. Ironically, prices continued to go up but activity went down.”
Malcolm said that local trend has become a national trend.
“There is a malaise in the economy,” he said. “The large majority do not feel good about whether their income is going to go up and whether they are even going to have a job.”
Malcolm said he expects the coming year to continue with that lower confidence.
“It’s going to be a gray market – not black; not white,” he said. “You are going to have a smaller buyer pool buying fewer units.”
One real estate agent in Carbon County sees improvement.
“Sales have been increasing,” said Cass Chies, broker/owner with Diamond 1st Realty, Palmerton. “There have been more homes being sold and the sales prices have increased.”
Chies credited creative mortgage lending packages and tax incentives.
“There are also first-time buyer incentives like a $2,000 tax credit being offered,” she said. “There are some other programs out there … with tax credit grants being offered.”
Chies said the late spring start and real estate taxes have tempered growth in the industry.
“As school districts continue to sometimes spot reassess, causing property taxes to increase, that has been a deterrent in some of the areas which still is slowing sluggish sales,” she said.
In Schuylkill County, broker Erica Ramus of Ramus Realty Group in Pottsville is optimistic.
“Things are still really busy here,” she said. “Our biggest problem is still getting money for people, on getting people qualified. The appraisal standards are getting stricter and stricter.
“We have buyers who want to buy and it seems a lot of deals fall apart for little tiny, naggy things that appraisers are requiring at the very end that has nothing to do with the quality of the house or the safety of the house or how it was built.”
Those things include fixing a leaky faucet and power-washing mildew off outdoor siding.
Lack of inventory in some price ranges contributes to the pressure.
“We have a lack of good middle inventory in the Pottsville area,” Ramus said. “We have a lot of low- and high-end homes but we do not have good, average middle-class right in the middle, say the $120,000 to $200,000. In certain towns, it seems like we can’t sell a house, like Minersville.”