Sales have been on the rise for several months, according to Lehigh Valley Association of Realtors.
View full sizeA sign advertises homes for sale Tuesday on Mill Race Road in Palmer Township.Those in real estate have been throwing around a number of fancy terms in recent months to describe what’s been happening in their industry.
They’ve invoked jargon such as “housing affordability index,” “market correction” and “absorption rate.” Many homeowners and prospective homeowners may not understand what it all means, but when added up, it comes down to this:
The housing market in the Lehigh Valley has been on the mend for several months and is expected to continually improve into the summer and likely beyond.
“There’s some pent-up demand,” says Larry Minsky, regional vice president of Weichert Realtors, which has offices in Allentown, Bethlehem and Easton. “People are just tired of waiting and want to move on with their lives. There’s also a population of people who are taking advantage of the lower mortgage rates.”
Ryan Conrad, CEO of the Lehigh Valley Association of Realtors, a trade association representing some 2,000 real estate agents in Lehigh and Northampton counties, also sees a steadily improving market. His association compiles monthly data on home sales in the region, and the math supports his views.
“We’re seeing positive growth in a number of key metrics,” he said. “Those different metrics says a lot.”
Conrad pointed to March’s LVAR housing report. It was the latest in a string of monthly reports that showed gains over the same time period the previous year. Pending home sales for March were up 20.3 percent and the average sale price rose 1.5 percent to $182,491.
And then there’s the housing affordability index, which compares the region’s median household income to what is needed to qualify for a median priced home under prevailing interest rates.
The index in March was at 215, which means the Valley’s median income was 215 percent of what it would cost to buy a median-priced home.
Meanwhile, the cost of renting is going up because fewer apartments are on the market in the region, according to Conrad, who attributes the rental shortage in part to more people opting for leases instead of mortgages in the wake of the recession.
“The rental market is much more competitive now,” he said. “If I can’t get what I want or what I want is too expensive, I’ve got to look at homes. From a real estate perspective, it’s an exciting time.”
Conrad said another factor adding to the excitement is the lack of change to the low interest rates. He said many anticipated the rates would be higher by this point in the economic recovery, but that hasn’t happened and lenders aren’t being as tight as they were a couple of years ago.
“We are hearing that closings are going smoother now and money is available if you’re qualified,” Conrad said.
Minsky called the historically low mortgage rates “an unbelievable selling point” for real estate agents. But he said he, like Conrad, believes there are other factors at play, including a general attitude that the overall economy is improving.
“People feel better about the economy,” he said. “I think the stock market run-up has something to do with it.”
That notion has prompted Weichert to move aggressively on courting business, Minsky said. Real estate agents are getting back in contact with people who put their homes on the market a few years ago but pulled them off because no one was making offers at the time. The company also is hosting more and more open houses as the summer nears, he said.
“I think that historically, the spring market is our busy season,” Minsky said. “However, more and more people are now buying throughout the year. … It’s not as seasonal as it used to be.”