Experts caution the recovery is still fragile.
A sign advertises this home for sale on Tamlynn Lane in Palmer Township in this file photo. Lehigh Valley home sales rose 33.2 percent in April compared with last year, according to a new report.The region reported 445 sales, up 33.2 percent from 334 sales reported in April 2011, according to a report released Thursday by the Lehigh Valley Association of Realtors. Year to date, sales are up 16.5 percent.
The average sales price rose 9.2 percent to $189,000 in April compared with 12 months ago.
“For the past several months, our members have been sharing anecdotal reports that real estate activity is steadily increasing,” LVAR CEO Ryan Conrad said in a statement. “The market data from our research substantiates in quantifiable terms what we have been hearing.”Clay Mitman, president of Prudential Paul Ford Realtors in Easton, said pent-up demand combined with a gradual increase in consumer confidence is aiding the market. Plus last year's sales total was unusually low, he said.
Real estate agents now say it’s more common to conduct several showings a week on an attractively priced home, some of which receive multiple bids.
“There is a belief from consumers that we have definitely hit bottom,” Mitman said. “Usually, no one sees the bottom until after it passes. I think that’s where we are at now.”Mitman cautioned that rebounding from bottom does not mean out of the woods.
“We’re so much teetering on a slight recovery in the real estate market that there is a concern that if interest rates were to rise, that would stop it dead,” he said.The news follows reports that mortgage rates have again fallen to record lows.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan ticked down to 3.83 percent, the lowest since long-term mortgages began in the 1950s.
The 15-year mortgage, a popular option for refinancing, dropped to 3.05 percent, also a record.
Loren Keim, owner of Century 21 Keim in Allentown, said many shoppers are buying now on fear that interest rates will rise after the November election.
The current sales pace still lags that of a healthy expansion, Keim said, which should produce more than 500 deals a month in spring.
“All things considered it is a slow recovery, but it is recovering,” said Keim, also an author who lectures at Lehigh University.The chief economic headwind is stubbornly high unemployment, which hovers around 8 percent, and does not include the many that have dropped from the work force altogether.
Access to credit is another issue. Federal Reserve Chairman Ben Bernanke said at a banking conference Thursday in Chicago that lending conditions are improving for businesses and consumers but many creditworthy Americans still find it difficult to get mortgage loans.
A good chunk of local home sales also stems from investors scooping distressed properties, hangover from the housing bubble of the prior decade.
Keim estimated that 23 percent of sales year-to-date are foreclosures and short sales. That figure is about 5 percent during a normal market, he said.
For the recovery to gain steam, more existing homeowners need to enter the market because such shoppers are typically trading up, so their activity generates additional sales. Keim said many shoppers in the current market are first-time buyers.
More sales would encourage more construction, Keim said, which would create jobs.
The LVAR report bodes well for the months ahead.
Pending sales, a future indicator, rose 36.6 percent in April. The region recorded 616 pending sales, or signed deals that have yet to close, last month, up from 451 one year ago.
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HOME SALES ON THE UPSWING
Here are local housing market figures comparing last month against the same time last year. Sales prices are listed in thousands of dollars.
April April ’11 Change
Home sales 445 334 +33.2%
Pending sales 616 451 +36.6%
Avg. price $189 $173 +9.2%
Median price $171 $160 +6.9%
Avg. days on market 89 96 -7.3%