Low inventory of homes for sale led to higher prices amid signs of a strong, yet slowing economy, contributing to a seller’s market, according to a report by the Greater Lehigh Valley Realtors reported on the residential real estate market for June.
The report said that new listings decreased 13.2 percent to 1,068, compared to June 2018. Pending sales were up 7.9 percent to 906 compared to June 2018 and inventory levels shrank 16.4 percent to 1,718 units compared to June 2018.
Sellers seemed more optimistic in the second quarter, according to the National Association of Realtors Housing Opportunities and Market Experience survey, as 46 percent of consumers said now is a good time to sell, up from 37 percent the first quarter.
But the Lehigh Valley is still searching for those sellers as the drop in inventory levels contributed to a 17.2 percent decline in the supply of inventory, which is down to 2.4 months.
Low inventory levels remains a challenge for the housing industry, though it has brought higher prices, with a median sales price increase of 5.6 percent to $216,500 and homes selling on average in 32 days, compared to $205,000 and 34 days in June 2018.
The median sales price of $216,500 was the highest on record for GLVR, said Justin Porembo, GLVR CEO.
“That really stands out that we really have a strong seller’s market,” Porembo said. “We see a really strong economy moving forward. I think we see a lot of consumer confidence going forward.”
To be sure, the report noted, there are signs nationwide that the economy is slowing. As an example, the Federal Reserve considers 2 percent a healthy inflation rate but the U.S. should remain below that this year, according to the report. The possibility of a rate reduction is in play following a string of increases over the last several years.
While the increase in home prices can affect affordability, Porembo said GLVR is keeping an eye on the housing affordability index and so far has not heard any pushback on the affordability issue.
“We definitely need to continue to beat the drum that with good interest rates and with people feeling good about their job prospects, there should be no fear about jumping into the market,” Porembo said. “We are hoping to see this continue into the fall. We see a strong housing market in our entire footprint.”
Another factor that shows the strong seller’s market is the list prices.
Carbon County sellers are getting 94 percent of list price, while Lehigh and Northampton counties are getting 98.6 percent, he added.