July’s heat seeped into the Greater Lehigh Valley’s residential marketplace, ending the month with a 4.2 percent growth in closed sales, an 11.3 percent bump in new listings and 5 percent increase in average sales price.
Industry experts expect that momentum to continue into the fall as pending sales also jumped 27.2 percent year over year.
“We haven’t seen these kinds of figures since back in 2004,” said Cass Chies, president of the Greater Lehigh Valley Realtors and broker with RE/MAX Diamond 1st, Palmerton. “It’s definitely turned into a seller’s market.”
Agents across the region see similar activity.
“We had an incredible summer,” said Erica Ramus, broker/owner of Ramus Realty Group, Pottsville. “We had a record numbers of closings in our office, so we’re really busy.”
Craig Stringer, owner of Pagoda Realty and Property Management in West Lawn, said his firm is continuing to see multiple offers on good inventory.
“In my company, business is up from last year, but good inventory is still an issue we’re seeing continuing,” he said.
HEALTHY MARKET, CONFIDENCE
Despite the region following a national trend of low inventory, Chies sees a healthy market in both the Lehigh Valley and Carbon County. The Lehigh Valley saw a 2.7 percent growth in the number of closed sales and a 14.8 percent jump in pending sales.
“Sellers are still doing what they need to do,” she said. “They are pricing it smart. That, together with the economy, we also have confidence on where we’re going right now.”
Chies sees many properties receiving multiple offers, resulting in slightly higher values.
“We will finish off probably surpassing numbers we weren’t anticipating,” she said. “In Carbon, we are up 18.9 percent [in closed sales], which is phenomenal.”
RESISTANCE TO LISTING
Carbon County also saw a 34 percent spike in pending sales and a 4.2 percent decline in new listings.
“Both markets are still seeing low inventory,” Chies said of Carbon County and the Lehigh Valley. “We still see a resistance in sellers not listing. I do know of some sellers who do not feel comfortable listing yet because they are not sure where they are going to go.
“When sellers want to downsize, the inventory is not there for them to downsize into. That probably could be where our bottleneck could be.”
SINGLE-FAMILY HOME SALES
No bottleneck existed in Schuylkill County, which saw a 25 percent spike in homes sold compared to last July.
Pending sales and new listings also jumped, 25.8 and 18 percent, respectively.
“We [sold] a lot of regular, single-family homes in June, July and August,” Ramus said. “The number of calls for investments and the number of people putting bids on investment properties have dropped off. I’m not sure if they took a break over the summer or if there’s a lack of inventory.”
BUYERS NEED TO BE BOLD
Similar to other real estate agents across the region, Ramus sees a shortage of inventory.
“There’s a lack of inventory across all price ranges,” she said. “It’s not that people are not listing their houses. It’s that we worked through the backlog of inventory.
“There were people on the market, 2010, 2011, where their prices were pre-recession prices. When they finally did lower [prices], we moved through the inventory, and now we don’t have enough replacement stock.”
According to Ramus, that means buyers have to be more aggressive.
“It means buyers have to make a good offer to begin with rather than testing the market and playing with lowball offers,” she said. “If they see a house they want, they have to make a good, reasonable offer to start.”
CONCERN OVER APPRAISALS
The low housing stock also may have contributed to a 1.1 percent drop in closed sales in Berks County. Yet July’s pending sales grew by 29.5 percent and new listings rose 5.9 percent.
“I’m still seeing low inventory, as we are nationally, but activity seems to be steady,” Stringer said. “There are plenty of buyers out there looking to take advantage of low interest rates, but the lack of good inventory is hindering the market a little bit.”
Stringer also sees appraisal prices affecting the market.
“I continue to see issues with appraisals not keeping up with attempted increases in values,” he said. “That seems to be the biggest frustration.”
Stringer remains optimistic.
“There continues to be buyer demand because of low interest rates,” he said. “A lot of the market depends on our national stability, as far as what’s happening around the world. But barring the status quo is maintained, I think we’ll see a continued increase in activity as well as values over the next few years.”
Warren County professionals also saw an increase in activity with a 6.8 percent jump in July closed sales and a 16.5 percent boost in pending sales.
“What I’m finding in the Warren County area is that the market is very active for first-time homebuyers,” said Daniel Fiedler, broker associate with Fiedler Realty LLC, Hackettstown. “In the higher priced properties, $400,000 and above, there’s less activity and there’s more inventory.”
Fiedler attributes the slow activity in higher-priced homes to an exodus of people who are retiring or relocating if they cannot find jobs.
“There’s a lack of inventory in the $300,000 range and down,” Fiedler said. “Because of the lack of inventory in that price range, market values have gone up a little bit in the lower-priced range.
“They have not gone up in the higher-priced range because there’s less demand. If you’re in Warren County and you have a house that’s $400,000 and up, you have very limited market participation.”
Fiedler also sees higher demand for urban rather than rural properties as buyers look for the ease of access to amenities and central sewer and water.
“Interest rates remain at a very attractive rate,” he said. “There’s still a glut of foreclosures properties on the market, which is the low end, and that low end is being dominated by the investor market.
“You’re seeing a lot of foreclosed properties … bank-owned properties that the builders, the investors are going in and renovating. They are either renting them or fixing them up and flipping them to the first-time homebuyers. That’s an active market.”
GROWTH IN LISTINGS
Monroe County also saw an active residential market in July with a 7.2 percent increase in closed sales, a 51.9 percent spike in pending sales and 63.9 percent growth in new listings over last July.
“This year has been a pretty good year,” said Bev Waring, broker with Waring Bowman Realty, Delaware Water Gap. “Our values have increased.
“If things are priced right and they are in good condition, we have been seeing multiple offers on quite a few properties, into a highest and best situation.”
BIG JUMP IN SALES PRICE
The Poconos also saw a 25.9 percent jump in average sales price compared to last July.
“Values are up 5 or 6 percent from last year,” Waring said. “With the multiple offer situation, that’s helped increase our values, and also the foreclosures are getting washed out of our marketplace.
“[Prices] are probably not going to come back as high as they were in 2004, ’05 and ’06, but I’m happy to see they are coming up.”
Waring also sees continued low interest rates contributing to the activity.
“The beginning of the year started off really strong,” she said. “Everything you put on had multiple offers because we had low inventory and things were just flying off the shelf. Low inventory really pushed people off the fence to grab it if they liked it.”