Winter home buying is expected to bring on more intense bidding wars as inventory levels continue to drop across the regional housing market, folks quarantining seek greater amenities, and mortgage rates hit near-record lows, Lehigh Valley real estate agents say.
For sellers, properties last month began selling at an average of just 19 days. It’s been an unusually active winter season. Sales typically start slowing down by mid-November, but this hasn’t been a typical season given the ongoing pandemic.
The Greater Lehigh Valley Realtors group, which tracks the market throughout Lehigh, Northampton and Carbon counties, stated in its December report that the housing market of early 2021 looks to continue trends experienced in the second half of 2020.
“We’re seeing strong buyer demand across our three-county footprint,” said the group’s CEO, Justin Porembo. “This demand is being buoyed by near-record low interest rates and the continued march out of high-occupancy locations and buildings in search of more rural living.”
Data from Northampton and Lehigh counties in December show an uptick in nearly every category across the board. There was an increase in new listings by 10.6{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 471 units. Closed sales increased by 26.4{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 832 units and pending sales jumped 34.5{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 550 units. The median sales price also spiked 17.5{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to $235,000.
Additionally, the percentage of “list prices received” rose 2.2{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 100{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb}.
Inventory levels in December continued to plummet by 56.5{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 623 units, leading to a Months Supply of Inventory that was down 55{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to 0.9 months. This low inventory means Days on Market remained fast, decreasing 55.8{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to the average of just 19 days. In real estate, months of supply is a measurement of how many months it would take to sell the current inventory of homes — in a market balanced between buyers and sellers, it would be about six or seven months.
Jack Gross, president of the Greater Lehigh Valley Realtors group, forecast early 2021 to continue with multiple offers on in-demand properties.
“The story will remain largely the same while the market waits and hopes for a boost in new construction and a surge in home sellers to help provide more balance to the market,” he said.
The following graph shows the average number of days between when a property is listed and when an offer is accepted in a given month of the year.
A silver lining amid the coronavirus pandemic was the record-breaking 2020 real estate market also brought on near record-breaking mortgage rates. Early 2021 seems to be on track with the same plummeting interest rates.
As of Thursday, the 30-year fixed average was at 2.79{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} and a 15-year fixed average was at 2.23{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb}, as of Thursday, according to Freddie Mac, the government-sponsored Federal Home Loan Mortgage Corporation.
Rebecca L. Decker Francis, who leads The Rebecca Francis Team affiliated with Berkshire Hathaway HomeServices Fox & Roach, told lehighvalleylive.com that homebuyers continue to pull out all the stops in an attempt to snatch up whatever few homes become listed on the market. Competition being fierce is an understatement, she said.
“With nearly twice the demand and only a small fraction of the normal supply, this is the tightest housing market on record,” Francis said for her office.
Creighton Faust, an area real estate broker with RE/MAX Central, said the biggest terms buyers are trying to be creative with continue to be inspections and appraisals. He’s even seen some waive both.
Francis has seen everything from buyers coming up with additional cash to help offset appraisal shortfalls to what is known as “love letters,” in which buyers mail notes to sellers expressing their passion for the property. Anyone looking to place an offer on a property currently for sale in the Lehigh Valley market better move lightning fast, she said.
The pandemic also has brought out buyers bored of quarantining in their current living situations. They are in search of such amenities as larger rec spaces, home theaters, gardens, in-ground swimming pools, home bar areas, and patios with grill pads and barbecue pits. For those working remotely, a modern office space is a bonus.
“After nine months of being cooped up inside, today’s buyers don’t just want ‘any house,’ “ Francis said. “They want plenty of room to spread out.”
The old adage continues to ring true when it comes to selling, even in the pandemic, she added.
“Homes that are in good condition, a good location and priced right, will sell,” Francis said. ” Homes that are in need of updates, are located in less than ideal locations, or are priced too high, will sit.”
Key metrics by report month and for year-to-date, starting from the first of the year.
Lack of inventory across the Lehigh Valley also continues to drive some buyers into Carbon County, in which closed sales were up to 79 units in December’s data.
Carbon County also experienced a spike in pending sales, increasing to 59 units in December. New Listings dipped to 59 — a difference of just two listings from the previous December. Inventory in that county also dropped to 116 units, leading to a Months Supply of Inventory of 1.5 months, according to Greater Lehigh Valley Realtors.
Cass Chies, broker-owner of RE/MAX Diamond 1st Real Estate in Palmerton, told lehighvalleylive.com that buyers are attracted to lower prices in Carbon, as well as the close proximity to such mountain resorts as Blue Mountain in Lower Towamensing Township. The median sales price in December for Carbon County was $188,000 compared to $235,000 in the Lehigh Valley.
Chies said she is seeing buyers moving to Carbon from New York and New Jersey to the cities in southern Pennsylvania to the Pocono area. Each had its share of multiple offers with some drastically exceeding the listing price. She also saw a fair share of inspection waivers.
A property that went on the market in Lehigh County this past Monday had five offers by Thursday, Chies said. Savvy buyers are leaving crowded cities and neighboring states with higher property taxes for Pennsylvania.
“They know they can get more for their money here,” she said.
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Pamela Sroka-Holzmann may be reached at [email protected].
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