Persistent low inventory in the Greater Lehigh Valley fueled a brisk seller’s market in April as homebuyers acted quickly to scoop up available housing.
“It’s insanity, pure insanity,” said Vibeke Lavan, real estate agent with ReMax Unlimited, Whitehall Township. “It’s a feeding frenzy. It’s like a clearance sale at Macy’s.”
Michael Chaknos, owner of Century 21 Park Road, Wyomissing, said homes are selling more quickly because there’s less inventory and that leads to higher prices in many price ranges.
Despite a 2.2 percent drop in the number of closed sales regionwide, pending sales rose 7.4 percent compared to last April. New listings showed a modest 0.7 percent increase, and days on market fell by another 4.5 days.
“It’s a seller’s market, and the buyers are all over everything that comes on,” said Ron Dunbar, broker with Bear Mountain Real Estate, Jim Thorpe.
The Lehigh Valley saw a 4.6 percent drop in new listings, with 58 fewer homes listed last month compared to April 2017. Closed sales dropped 10.6 percent, yet those homes sold on average 11 days sooner than those sold last April.
“The last few months have been unbelievable,” Lavan said. “Houses are going on the market, [and] two or three days later, they have multiple offers.
“There are buyers out there wanting to buy properties, and there’s just nothing to buy. There’s so little inventory and so much competition that people are bidding higher and higher.”
Lavan sees the lack of inventory creating a bottleneck as potential sellers hold off listing their homes until they find a replacement home.
“It’s a strong spring market,” she said. “Interest rates are creeping up but consumer confidence is high. Sellers are starting to realize what kind of commodity they have. My gut tells me it’s going to get better. I think we will get more inventory.”
Buyers in Berks County also hope for more inventory. But 21 more closed sales, 57 more pending sales and only 31 additional new listings April over April dash that hope, for now.
“Our inventory is lower than it was 12 months ago, dramatically lower in some respects,” Chaknos said. “Back in ’05 and ’06 at the height of the market, over a decade ago, there were 800 new homes built in Berks County every year.
“For the last decade, I think there’s only 25 percent of that, maybe 200 homes built a year.”
Chaknos credits that large deficiency for contributing to the county’s inventory woes as buyers opt for existing inventory to bypass higher taxes assessed on new construction.
“They are not moving or they are trying to find old homes that are assessed at much lower figures,” he said. “We’re not too much different than we were last year in terms of the number of sales, but our inventory is way down. …
“The bottom line is that prices are going up, sales are relatively the same and the choices are fewer than before.”
INFLUENCE OF MILLENNIALS
Brisk April activity in Carbon County ended with a 46.5 percent spike in closed sales and a13.6 percent jump in pending sales in April when compared to last April.
“Our market is like the Lehigh Valley,” Dunbar said. “We’re very busy. We just sold one yesterday over asking price, and that’s become pretty much the norm. If it’s a good house, they sell fast. The problem is there’s not enough houses and there are more buyers.”
According to Dunbar, those buyers include a strong millennial presence.
“They are definitely a strong force in the market,” he said. “There’s still a lot of people coming from New York, New Jersey, Philadelphia. Vacation homes are still hot.
“If you have a house you want to sell, you have a very good audience that’s out there waiting for your house to hit the market. Agents just can’t get enough listings.”
Dunbar expects the residential market to remain strong throughout 2018 despite record-low inventory.
“A lot of people that want to build are settling for existing homes … because the prices of all the goods and services have gone up,” he said.
27 FEWER DAYS TO SELL
While existing home sales and pending sales in Schuylkill County fell 4.3 and 4.1 percent, respectively, homes flew off the market in 27 fewer days than those sold last April.
“Inventory is extremely low,” said Patricia Freeh-Stefanek, associate broker with Gene Durigan Real Estate, Tamaqua. “It’s very busy.
“I see a lot of low-end priced [homes] being sold to investors and then $50-, $60,000 is not moving. It seems young people don’t want to use that stepping stone to buy something in town, live in it a couple years and move onto something more expensive. They just want to go right hook, line and sinker to the expensive one.”
Freeh-Stefanek sees prices remaining stable in spite of the limited inventory.
“In the entire school district of Tamaqua, which is fairly large, there’s only 50 houses listed on the market,” she said. “It was down to 40-some. It used to be somewhere from 70 to 90. It’s a seller’s market because there’s not many houses out there.”
BOOST IN PRICES
Monroe County in the Poconos saw a 0.9 percent in closed sales while new listings fell 8 percent April over April.
“Inventory was really low in the last couple months,” said John Keely, real estate agent with the Sandi Meisse team at ReMax Results, Sciota. “The Pocono market over the last year continues to grow.
“Prices seem to be moving up about 4 to 6 percent, depending on the area. Sellers are getting anywhere between 95 and 98 percent of the list price.”
Keely sees continued strength in the residential market, including a variety of buyers.
“We have a huge investor market and then when their houses are done, they’re like brand new,” he said. “Because of our location, you still have a lot of people coming from those metropolitan areas for looking for first homes.
“We still have other areas where people are looking for secondary homes. Our market is still mainly first-time buyers but with a strong second on vacation homes.”
‘LOT OF ACTIVITY’
Inventory in Warren County, N.J., grew as new listings jumped 29.6 percent in April while closed sales edged upward by 1.6 percent.
“I see more houses going on the market that are bank-owned, but they go off the market,” said Cynthia Cheng, sales associate with Fiedler Real Estate, Hackettstown. “I see [homes] slowly coming on the market. After the winter, it’s starting to pick back up.”
Cheng also expects activity to remain brisk.
“The market is very, very hot right now,” she said. “I see a lot of millennials, a lot of younger people buying homes earlier than past generations. I do see a lot of younger people who have good jobs and can afford to buy new homes starting to buy homes. It’s a lot of activity.”