LV median sales price higher than 2007 real estate bubble; closed sales down for fifth month
The sellers’ market continued apace in the Lehigh Valley during the summer real estate season.
According to the Greater Lehigh Valley Realtors (GLVR) June report, competition by buyers boosted quick sales above the asking price.
On average, a house is selling in little more than a month.
And, according to the GLVR, the June Median Sales Price is higher than that of when the housing bubble burst in 2007 at the start of the Great Recession.
Meanwhile, the percentage of closed sales dropped in June for the fifth month in a row, by 25.2 percent to 719, compared to 961 closed sales in June 2017.
For the year-to-date, closed sales for 2018 are down by 8.6 percent, with 3,644 houses sold, compared to 3,986 houses sold year-to-date in 2017.
Pending sales increased slightly, by 2 percent in June to 802, compared to 786 in June 2017.
However, pending sales for 2018 are down by 4.1 percent to 4,334, compared to 4,519 year-to-date for 2017.
Inventory levels again shrank in June, by 37.3 percent to 1,571 units, compared to 2,507 units in June 2017.
The Months Supply of Inventory also dropped, by 37.8 percent in June to 2.3 months, compared to 3.7 months in June 2017.
Days on Market was down 7.9 percent in June to 35 days, compared to 38 days in June 2017.
“Being quick with an offer is still the rule of the day as the number of days a home stays on the market drops lower,” said Sean LaSalle, President of GLVR.
“If that wasn’t enough for buyers to mull over with each potential offer, being aware of pending mortgage rate increases is once again in fashion,” LaSalle said.
While the strength of the United States economy is said to have helped purchase offers pile up, the Fed recently increased the federal funds rate by 0.25 percent, marking the second rate hike this year and seventh since late 2015.
According to the GLVR, although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability.
In June, prices continued to increase with the Median Sales Price increasing 12.6 percent to $225,000, compared to $199,000 in June 2017.
That means that the June Median Sales Price is higher than that of when the housing bubble burst in 2007 during the Great Recession, according to the GLVR.
The Average Sales Price increased 8.8 percent in June to $253,027, compared to $232,579 in June 2017.
Even with the record-high Median Sales Price, sellers, on average, received 98.7 percent of asking price in June, a 0.5 percent increase, compared to 98.2 percent in June 2017, according to the GLVR June report, which was released July 12.
New listings were down 15.2 percent in June to 995, compared to 1,174 in June 2017.
Consequently, the Housing Affordability Indiex was again down, by 16.4 percent in June, compared to June 2017.
“Inventory may be persistently lower in year-over-year comparisons, and home prices are still more likely to rise than not, but sales and new listings may finish the summer on the upswing,” said GLVR CEO Justin Porembo.
“The housing supply outlook is beginning to show an increase in new construction and a move by builders away from overstocked rental units to new developments for sale. These are encouraging signs,” Porembo said.
Even so, at the half-way mark for 2018, closed sales are trending downward in the Lehigh Valley.
Closed sales in May were down 8.5 percent with 765 houses sold, compared to 836 houses sold in May 2017.
Closed sales in April were down 10.6 percent with 591 houses sold, compared to 661 houses sold in April 2017.
Closed sales for March were down 7.9 percent to 595 houses sold, compared to 646 houses sold in March 2017.
Closed sales for February were down 6.7 percent to 421 houses sold, compared to 451 houses sold in February 2017.
Closed sales for January were up 2.6 percent to 442 houses sold, compared to 431 houses sold in January 2017.
In Carbon County, according to the GLVR, inventory was the same, with 329 units available in June 2017 and June 2018.
The Months Supply of Inventory was down 15.9 percent to 5.8 months.
The Median Sales Price decreased 4.7 percent to $131,720.
Pending Sales climbed to 65, versus 59 the previous June, and there was an increase in New Listings, which hit 108.
The Greater Lehigh Valley Realtors is a not-for-profit trade association representing more than 2,000 Realtors in Carbon, Lehigh and Northampton counties.
GLVR provides professional development and training resources, competitive market information, legislative advocacy, peer review and mediation processes for members, and a dispute resolution service for consumers.
GLVR owns and operates the Greater Lehigh Valley Multiple Listing Service (MLS) and the Greater Lehigh Valley Real Estate Academy.