The Greater Lehigh Valley’s residential real estate market reflects what’s happening across the nation.
“There’s no shortage of buyers, but there’s a big shortage of properties,” said Chris Hoffman, an agent with Lehighvalleyjustlisted.com, Bethlehem.
“Inventory is about half of what it was two to three years ago. Homes are sometimes selling faster than I can show them.”
Throughout the Greater Lehigh Valley, homes sold last month sat on the market an average of 22 fewer days than those sold in March 2017.
“The inventory level is down, which is driving demand upward,” said Anthony Borellia, an agent with Century 21 Gold, Wyomissing. “It’s definitely a seller’s market.”
A lack of local inventory, combined with lingering winter weather, pushed closed home sales down 7.4 percent in March, with 113 fewer homes closed than March 2017. Yet those that sold did so 22 days sooner and for 5.4 percent more, a testament to high-buyer demand and brisk activity.
Across the region, new listings declined 13.9 percent last month – 345 fewer homes compared to March 2017 – indicating the trend for low inventory may continue.
URGENCY AMONG BUYERS
In the Lehigh Valley, March’s new listings fell 18.6 percent and closed sales dropped 7.9 percent.
“There’s a big sense of urgency with a buyer now,” Holland said. “Normally, I could meet with you, sit down and find a few you like, look at some homes.
“Now I’m having to do that three, four, five times until we are finally able to get one because of multiple offers and we missed out on three or four homes before we finally get one.”
Hoffman sees that activity creating its own challenges as appraisal values lag behind values offered by overbidding. Despite the challenges, he expects a strong 2018 residential market.
“Buyers are going to need to be very aggressive,” he said. “The other thing that buyers are fighting is interest rates are going up, which is reducing your buying power ever so slightly. … For the foreseeable future, things are definitely going to be crazy.”
HIGHER LIST PRICES
Berks County sales reflect the Valley’s dynamics, as homes sold 19 days sooner than those sold last March. The county also saw a 6.8 percent drop in closed sales and 2.6 percent fewer new listings.
“It’s just becoming a little bit of a challenge for homebuyers just because of the limited inventory,” Borellia said. “Interest rates have crept up a little bit. Supply and demand are driving home prices up a little bit. They are still very affordable, but it’s changing the way people are buying to some extent.”
Borellia also sees changes in seller activity.
“People are pushing the envelope a little bit with list prices when they come on the market, just because there is limited inventory,” he said. “If a house is worth $200,000, they might be listing it for 5 or 10 percent more than what the going market value is just because of their ability to get it.”
Schuylkill County saw a 13.7 percent drop in closed sales and a 49.1 percent drop in new listings, compared to last March.
“We have a little bit of a lack of inventory as well,” said Kim Hillegas, broker with Charlotte A. Solt Real Estate, Tamaqua. “We’re seeing a lot of activity and multiple offers. If properties are priced right, they are selling quickly. It’s a much better market probably than it was two to three years ago when things really slowed down.”
Hillegas also sees more activity in multi-unit properties.
“Investors seem to be willing to pay more for completely occupied income-producing multi-unit properties than they were,” she said. “Years ago, people weren’t even looking at them, anything priced over $100,000. Now we’re getting offers on them in a relatively short period of time.”
Hillegas expects low inventory and high buyer demand to fuel more multiple offers and higher prices.
22 PERCENT JUMP IN WARREN
Warren County, N.J., saw a 22.3 percent jump in closed sales, 13.3 percent increase in pending sales and 3.9 percent bump in new listings, March over March.
“The inventory has been low,” said Carrie Perrucci, manager/broker with Weichert Realtors, Phillipsburg. “A lot of homeowners have chosen not to put their homes on the market because they like the current interest rate. When something does come on the market, it’s coming off the market very quickly.”
Perrucci also sees multiple offers and creative tactics by agents to expedite those offers.
“We see a lot of brokers putting properties on the market; however, they are holding showings until the first open house,” she said. “They have several sales associates sit at the open house, and then the buyers can go, preview it with their agent and then put an offer in at the open house. That’s another trend.”
Similar to other agents, Perrucci hopes to see more listings.
“You can call any office throughout the country and we all want sellers,” she said. “When something comes on, it’s just amazing how quickly a house goes right now.”
Quick sales and fewer listings also contributed to lower inventory in Monroe County in the Poconos, which saw March closed sales drop 20.2 percent and new listings fall 17.7 percent.
“We’ve been steady and strong,” said Lorraine Barbella, an agent with Pocono Properties Realty, Blakeslee. “I did notice that this year was the first year where I had buyers straight through the winter. There was no slow period.”
Barbella’s clients typically buy vacation and second homes.
“They’re buying working homes, which means that the house will pay its own bills and become a rental home, full time or even part time to help pay its bills,” she said. “Sales are booming right now. I see a lot of cash coming past my desk, especially in the large ticket items. I have noticed probably $900,000 and above, they generally pay cash.”
She sees prices rising.
“I deal with a lot of investors who are looking to diversify their money,” she said. “Sale prices are increasing.”
BUYERS IN DENIAL
Carbon County enjoyed a 17.9 percent increase in closed sales and a 28.6 percent jump in new listings.
“Like other areas, we are seeing low inventory in the entry-level price range,” said Aggie Schoenberger, broker with Castle Gate Realty, Lehighton.
She said quite a few buyers are in denial about the new dynamic.
“Interest rates are up and values are up and many buyers can no longer afford the houses they were looking at just last year,” Schoenberger said. “Many of them, rather than adjust, continue to wait … thinking that a house that meets their criteria will come on the market in their price range … when in reality, all that is left in their price range are homes that need some repairs or have other concerns.
“On the other hand, those buyers who recognize how fast and drastically the market is changing are quick to jump on the houses that are available.”