LV Realtors February report: Housing market at a ‘stalemate’
The Greater Lehigh Valley Realtors® (GLVR) has reported February data showed that while the Lehigh Valley housing market has been performing exceptionally well throughout the coronavirus (COVID-19) pandemic, the severe lack of inventory has created a bit of a stalemate.
“We’re seeing signals that suggest buyer demand will remain elevated and tight inventory will continue to invite multiple offers and higher prices across much of the housing inventory,” said GLVR CEO Justin Porembo. “But without a robust amount of sellers, if those sellers become buyers, where will they go? Everyone just kind of becomes stuck where they’re at.”
Buyers and sellers being “stuck” is showing in market statistics. With data released March 12 for the month of February, Northampton and Lehigh counties saw decreases almost across the board, including:
• New Listings dropped 28.5 percent to 501.
• Pending Sales were down 19.0 percent to 490.
• Closed Sales slid 11.7 percent to 416.
• Inventory levels shrank 58.4 percent to 516 units.
Prices continued to gain traction. Because of the low inventory, the Median Sales Price went up 14.4 percent to $230,000.
Percentage of List Price Received went above and beyond, increasing 2.7 percent to 100.4 percent.
Days on Market was down, decreasing 54.9 percent to just 23 days.
Sellers were encouraged as Months Supply of Inventory was down 58.8 percent to 0.7 months.
“There has been a consistent rise in housing permits for single-family homes, which is a good sign that the supply and demand imbalance in the residential real estate market could start to ease,” said 2021 GLVR President Tim Tepes. “There will also be a natural seasonal upswing in inventory in spring and summer after few new listings during the winter months. These trends, along with an anticipated ramp-up in home construction, will hopefully provide much-needed supply,” Tepes said.
In Carbon County, which continues to show a healthy amount of housing-related activity, the Median Sales Price increased to $159,900. Closed Sales were up to 49. Pending Sales increased to 71. New Listings dipped to 53. Inventory dropped to 85 units, leading to a Months Supply of Inventory of 1.1 months. Homes are moving much faster for the association’s more rural county, with Days on Market dropping to 35 days.
Mortgage interest rates ticked a bit higher in February, but remain below February 2020 levels. Interest rates may rise a bit further in coming weeks, but according to Freddie Mac chief economist Sam Khater, “While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3 percent range for the year.” With rates still at historically low levels, home sales are unlikely to be significantly impacted, though higher rates do impact affordability.
For homeowners struggling because of COVID-19, government agencies are continuing efforts to help those in need. The Federal Housing Finance Agency announced it will allow homeowners with loans backed by Fannie Mae and Freddie Mac to receive an additional three months of forbearance, extending total payment relief to up to 18 months. Qualified homeowners must already be in a forbearance plan as of the end of February.