Lehigh Valley home sales, prices pick up in October

Sales rose 18.1 percent, according to the Lehigh Valley Association of Realtors.

Lehigh Valley home sales rose 18.1 percent in October, extending a gradual recovery that began more than a year ago, new figures show.

Average prices rose more than 12 percent. The region sold 451 homes last month, up from 382 homes in October 2011, according to a report released Thursday from the Lehigh Valley Association of Realtors.

Sales, still well below boom levels of the prior decade, have steadily risen since mid-2011.

The October increase marked 15 straight months where sales surpassed prior-year levels. Year to date, volume is up 15.5 percent from the 2011 pace.

“Overall, I think consumer confidence is coming back,” said Loren Keim, president of Century21 Keim in Allentown and a Lehigh University lecturer. “I also think people realize that interest rates will rise again regardless of what the government says.”

To encourage consumer borrowing, the Federal Reserve has said it will maintain historically low interest rates through mid-2015. Fed policies influence bank lending, affecting the housing market.

The average 30-year mortgage sold at 3.43 percent Thursday, according to bankrate.com. The 15-year mortgage, a popular refinance option, was 2.84 percent.

Keim said he believes those rates will increase sooner than the government projects, which could prompt more shoppers to buy rather than defer purchases.

But Keim said the big headwind remains a weak job market that limits consumer spending. Unemployment in the Lehigh Valley was 8.8 percent in September, the most recent month available, well above pre-recession levels.

The latest report from LVAR also shows it’s taking less time to sell a home.

The average home sold after 72 days on the market last month. That’s down from 76 days in September and down from 83 days one year ago.

“This is great news for those selling homes,” LVAR President Andrea Decker said in a statement. “For those buying homes, it means they no longer have the luxury of waiting to make an offer on a property of interest to them.”

The average sales price in October rose to $203,000, up 12.2 percent from $181,000 in October 2011.

Keim said the rising average reflect more homes being sold at the upper end, not an across-the-board increase. Seventy homes priced at $300,000 or more sold within the region last month, up from 43 in October 2011.

The median sales price — or midpoint — rose to $168,000, up 8.4 percent from $155,000 in October 2011.

Keim said a large number of foreclosures and short sales, where owners sell for less than what their home is worth, are still cramping prices.

Keim said he expects distressed properties, which he estimated at near one-fifth of total sales, to drag the market for another six to nine months.