November activity in the Greater Lehigh Valley residential real estate market showed continued slowing.
Closed sales decline 3.4 percent in November while homes sat eight fewer days on the market before selling compared to November 2017. New listings continued their yearlong decline with a 5.9 percent drop over last November.
“There’s a shortage of listings coming on the market,” said Richard A. Zuber, broker/owner with Richard A. Zuber Realty in Boyertown, Berks County.
Real estate agents believe that struggle and other factors have influenced activity across the board.
“Normally you have a lot of repos or bank-owned (properties) that come off the market,” Zuber said. “There’s still a few of those around, a few more than I anticipated would be around at this time. I haven’t seen a growth in new construction, at least in the general Berks County area where I’m at. What that does is it stymies people to put their house on the market because they stay where they are at because they can’t find a new construction that they want.”
Berks County saw a 7.8 percent drop in closed sales and 7.7 percent fewer listings than last November.
FEWER NEW HOMES
Zuber also sees little new construction as developers hold onto land until projected profit margins look more favorable.
Less development hampers the availability of quality housing, which has contributed to an 8.6 percent jump in average sale prices over the region November over November.
“When you have shortages and a higher demand, you’re going to have increased prices,” Zuber said.
Despite the challenges, Zuber remains optimistic.
In New Jersey, Rich Tillman, broker/owner of Re/MAX Town and Valley in Hackettstown, Warren County, New Jersey, also sees continued stability and strong buyer demand.
“Anything that comes on the market and was in good condition and priced reasonable was going in less than 30 days,” he said. “Good stuff was selling throughout this entire year, certainly under 60 days. The weather has certainly worked against us but at the end of 2018, it turned out to be a good year for us.”
INVESTORS STILL ACTIVE
Tillman continues to see investors snapping up foreclosures and bank-owned properties to flip or rent as well as first-time homebuyers and other buyers moving to escape escalating prices and taxes in locations to the east.
In the Lehigh Valley, average sales prices rose 1 percent November over November to $219,782 while closed sales and new listings fell by 3.6 and 7.0 percent, respectively.
“Inventory is very low,” said Amy Bishop, real estate agent with Weichert Realtors in Bethlehem. “It’s been low really the entire year so it certainly is a seller’s market.”
Bishop expects a gradual improvement in the industry moving forward.
“Interest rates are slowly going to inch up but buyers are out there looking to purchase,” she said. “The coming year, I think, the trends are going to continue.”
The Poconos’ market saw a 6.3 percent drop in closed sales and a 15.5 percent jump in average sales price for homes sold.
“Some of (the lower closed sales) is because of the very wet summer that we had,” said Eileen Chaladoff, real estate agent with Prudent Associates Real Estate in, East Stroudsburg, Monroe County. “A lot of homes have mold damage. Buyers are shying away from them … The other thing that might be happening … some people are waiting to see what the taxes are going to be in Monroe County since the reassessment is coming to a completion. So they are not sure if some are going up, some are going down, some are staying the same.”
About 2,000 homes remain listed in the Poconos, a relatively consistent inventory for the past two years, according to Chaladoff.
“I don’t see a real huge uptick in (inventory) and I don’t see a real drop like back in ’04 to ’06 when we had ‘you better carry a contract with you when you showed something because the inventory was so low,’” she said. “I think you’ll see some agents will say there are first time homebuyers out there but they are cautious. Because the interest rates rose, probably 10 percent of the first time homebuyers we had before dropped out because they don’t qualify … Unfortunately, the sellers didn’t bring their prices down to compensate for it.”
EYEING A GOOD YEAR AHEAD
Even though changes continue, Chaladoff projects a good year coming.
Buyers and sellers in Schuylkill County slowed in November. The county saw a 13.7 percent drop in closed sales and an 8.6 percent drop in new listings.
“It seems like some of the properties were getting multiple offers or they are not on the market long because of the lack of inventory, bringing up the prices,” said Patricia Freeh-Stefanek, a real estate agent with Gene Durigan Real Estate in Tamaqua.
Freeh-Stefanek expects activity to remain consistent as buyers look to buy before any additional bumps in the interest rate.
Interest rates have not affected activity in Carbon County, which saw a 10.4 percent increase in November closed sales. Pending sales also rose by 12.5 percent and new listings grew 14.9 percent.
“We’re still seeing a healthy selling market,” said Cass Chies, broker/owner of Re/MAX Diamond 1st in Palmerton. But, Chies added: “The problem is quite a few sellers want to know where they’re moving to once they sell and the problem is they haven’t found that yet. Because of that, they are not comfortable listing their homes.”
Chies also sees little new construction relieving that burden. An influx of buyers from New York, New Jersey and the Lehigh Valley seeking lower prices and taxes adds to the mix.