12 Feb Lehigh Valley home prices likely to rise into mid-2020, Realtors group says
Home prices likely will climb as sellers head into mid-2020, the Greater Lehigh Valley Realtors group says.
The group’s annual report showed home prices also rose in 2019 compared to the year prior. The overall median sales price increased 3.3% to $206,000 for 2019 and single family home prices were up 2.4% compared to 2018. The prices of townhomes and condos climbed 4.1% over 2018.
The Federal Reserve in 2018 set four interest rate hikes, but in 2019, rates went down three times. Rates appear to remain low in early 2020. The 30-year fixed average was at 3.45% and a 15-year fixed average was at 2.97%, as of Feb. 6, according to Freddie Mac, the government-sponsored Federal Home Loan Mortgage Corporation.
Greater Lehigh Valley Realtors attributes the 2018 hike due to Gross Domestic Product growth in 2019 that came in notably lower than 2018, showing the Fed’s alternating efforts to keep the nation’s economy at a “steady simmer and not a full boil.”
“The housing market continues to remain healthy nationwide with price gains and limited inventory being the most common threads across markets,” the group states in the report.
Tight inventory continues to constrain buyer activity in part of the United States, while some areas are seeing increased seller inventory starting to improve buyers’ choices, the group said.
Inventory levels shrank 25.4% to finish the year at 1,284 units. This led to a Months Supply of Inventory that was down 25% percent to 1.8 months — a new record low. 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.
As a result, buyers continue to move past the Lehigh Valley and into nearby Carbon County. That county had a stellar year in home sales for 2019 and one of the best for the record books, the group says, noting closed sales were up 11.9% to 789 and there were 137 new listings. The year closed with 271 active listings. The original list price received at sale for 2019 was on average 94.7% with the overall median sales price increased 0.4% to $136,444.
Another trend for the Lehigh Valley moving into mid-2020 will be improving new construction activity, but still below the levels required to fully supply the market’s needs. There also could be a softening of activity that may temper the market in the second half of the year due to 2020 being an election year, the group says.
Pending sales in 2019 overall increased 2.7%, finishing 2019 at 8,678 sales while closed sales were up 1.7% to end the year at 8,587 sales. In comparing 2019 to the prior year, the amount of homes available for sale was lower at 25.4 percent. There were 1,284 active listings at the end of 2019. New listings decreased by 5.2% to finish the year at 10,904.
Sellers also received, on average, 98.1% of their original list price at sale with the year-over-year original list price at sale relatively unchanged. The data continues to show 2020 will be a strong year for those looking to sell in the Lehigh Valley, the group says.
About the Greater Lehigh Valley Realtors:
The group is a trade association representing more than 2,500 real estate professionals and tracks the housing market throughout Lehigh, Northampton and Carbon counties. It is governed by an all-volunteer board of directors and managed by an appointed chief executive officer. The group provides professional development and training resources, competitive market information, legislative advocacy, a peer review and mediation process for members, and a dispute resolution service for consumers.