Buyers again bought more homes in the Greater Lehigh Valley in 2017, continuing a five-year growth trend in the residential real estate market.
Closed sales for the year rose 4.3 percent, ending with 20,073 homes sold – 831 more than those sold in 2016 and, for the first time in at least five years, topping 20,000.
The average sales price grew by 4 percent or $6,260, jumping from $156,887 to $163,147.
And homes that sat on the market sold on average in 84 days, a full two weeks faster than in 2016.
“It’s definitely a market for sellers because the inventory levels are low,” said Stuart Dubbs, real estate agent with Re/Max Central, Allentown. “That bodes well for sellers, because if there is a shortage of inventory, there’s not much to pick from for buyers.”
A shortage of inventory also affected other areas of the market.
“The biggest thing [in 2017] was the days on the market,” said Eva Eisenbrown, associate broker with Century 21 Park Road, Wyomissing. “If something was nice, it was gone quickly. If it was exceptional, it was gone in a heartbeat. It was totally a seller’s market, and the days on market reflect that.”
The 4.3 percent bump in 2017 was on top of double-digit percentage gains the previous two years.
“Our specialty is farms, country estates and historic properties,” said Jonathan Coles, president of the Schuylkill County Board of Realtors and broker with New Pennsylvania Realty, West Penn Township. “As soon as we were listing them, we had buyers for them.”
GOOD TIME FOR BUYERS
Buyers in Lehigh and Northampton counties bought 319 more homes last year at an average sales price $10,286 higher – $215,271 – than in 2016. Those homes sold an average of two weeks more quickly, falling to an average of 48 days on the market.
“Pending sales are moving up, as are closed sales,” Dubbs said. “Your days on market have dipped way low. Interest rates are still pretty stable, anywhere from 3.88 to 4.18.
“So now is really a good time for buyers to buy before the interest rates start to move up by the end of the year, which I think we will see.”
Dubbs sees activity in all price ranges, including homes priced more than $500,000.
“That range tends to be a little sluggish and takes a little longer to sell,” she said. “I’m thrilled to see the increased activity on that price range. I feel that we’re going to be in a good, strong market this year. All of the economic indicators are good.”
Berks County saw 202 more closed sales in 2017, a 4.1 percent bump. Those sales sold at an average price of $7,207 more, ending at $177,300, and 20 days more quickly than those sold in 2016.
“There was just not a lot of inventory,” Eisenbrown said. “That translates to the days on market, because it really was a seller’s market last year.”
Eisenbrown credits taxes, an improved economy and mobility as factors affecting the Berks residential industry last year.
“Even though we don’t have the Vanity Fairs and the big companies where people are relocating, I think people are moving out of New York and New Jersey and surrounding areas just because of the cost of living and taxes,” she said.
“The big thing is the consumer confidence. With taxes being reduced, that will help consumer confidence and get us even more buyers, which will, if we don’t get a lot more listings, make it even more of a seller’s market.”
MORE MONEY TO SPEND
Schuylkill County also reaped the benefits of a seller’s market in 2017 with a 9.2 percent jump in the number of homes sold. The average sales price rose by a modest $1,322 to $97,507, while homes sold on average 12 days more quickly than a year ago.
“A lot of agents that I know in Schuylkill County were very busy both listing and selling and had a bevy of buyers looking for properties,” Coles said. “They had more confidence in the market and they had more money to spend. They were ready to make the move.
“The stock market increased also in 2017, so I believe people were seeing increases in their investments in the stock market and they wanted to put their money somewhere safe. There’s no place safer than real estate.”
Coles also credits the county’s proximity to major metropolitan areas and low interest rates for its brisk residential activity in 2017.
“All of the interest rates that my buyers got last year were very good – I want to say from the 3s to the 4s [percent],” he said. “It helped to make housing more affordable, and it made sense for a lot of people to buy because they weren’t paying a whole lot of interest and their money was going further.
“There are deals out there, and when you have motivated buyers and motivated sellers, you’re able to reach a favorable outcome.”
Warren County, N.J., saw a favorable outcome in 2017, with a 13.2 percent jump in the number of closed units and a reduction of 14 fewer days that homes sat on the market to 84 days. Unlike other areas around the region, Warren saw a drop – $7,616 less – in average sales price, year-over-year.
“You have to look at a broader picture of how things have moved,” said Clay Mitman, broker/owner of Berkshire Hathaway HomeServices Paul Ford Realtors of Easton. “What happens is our market strengthens to the east and it moves west. That has a definite impact on the market, which is why you see so many more sales taking place in ’17 than in ’16.”
Mitman offers his take on why average sales price dropped.
“Because the number of units has increased – but you have so many properties that were in the city of Phillipsburg that weren’t selling that are now selling – it’s taking the average of the entire county downward,” he said.
In suburban areas, however, Mitman sees prices rising.
“In those markets, the days on market are extremely low and the prices are very strong,” he said. “The market is actually very good in the township markets. … People are leaving eastern New Jersey because they are finding more affordable properties in western New Jersey, where they can buy a single-family home.”
BIG PRICE JUMP IN MONROE
Single-family and second home sales continue to grow in Monroe County. Despite a 0.6 percent drop in the number of homes sold in 2017, average sales prices grew 12.9 percent, or by $16,035, to $144,558.
“I’m seeing a lot of movement,” said Janice “Dee” Kasarda, real estate agent with Century 21 Select Group, Pocono Lake. “There was a huge foreclosure market up here because people walked away from their second home and those foreclosures are about wrapping up now.
“You don’t have those bargain homes. All the lower-priced houses were gobbled up, and now it’s really becoming a seller’s market.”
Kasarda credits low interest rates and their expected increase to the brisk activity in 2017.
“Now you have people that are much more serious with what they’re buying,” she said. “I see the market getting better. Since July, August, it has just popped, just taken off like crazy.
“I anticipate that to continue just by the number of phone calls I have and clients I have to keep up on.”
Agents kept up with activity in Carbon County last year, which saw a 10.2 percent jump in the number of closed sales, with 56 more homes sold in 2017 at an average $10,327 more. Those homes sold 12 days faster than in 2016.
“There’s a ton of buyers in the market,” said Chad Fritzinger, real estate agent with Koehler Marvin Realty, Lehighton. “They are getting backlogged because they are not finding what they are looking for. There is not much inventory.”
Fritzinger continues to see buyers waiting for the right house and believes the low inventory has contributed to a jump in the average sales price.
“We were in the valley for a long time, and now we’re starting to come back up,” he said. “It’s a roller coaster ride like that with real estate, depending on how long it’s going to stay up or stay down. It all depends on the economy.”
Economic conditions continue to bring out investors, according to Fritzinger.
“People are buying … at cheap prices, fixing them up and having them sold on the regular market. That’s helping clear up these derelict properties. I think we’re going to be in a healthy market in spring, and it’s just going to keep continuing.”