For Greater Lehigh Valley Realtors, as well as area homebuyers and sellers, 2015 was a remarkable and rewarding year — the housing market’s best year since the recession.
For Greater Lehigh Valley Realtors, as well as area homebuyers and sellers, 2015 was a remarkable and rewarding year — the housing market’s best year since the recession.
And it looks like existing-home sales are expected to increase in 2016 at a moderate pace, although affordability pressures from inventory shortages and rising mortgage rates could slow the potential for even stronger sales momentum.
In 2015 – based on data pulled in mid-November – the greater Lehigh Valley real estate market continued to improve at a healthy pace, with closed sales showing a 13.4 percent increase compared to 2014.
When you also consider that home prices rose 2.2 percent with the average price being $202,216 … homes sold quicker in 2015, averaging 68 days on the market (compare that to the 110 days it took in 2011) … and pending sales jumped 16.7 percent … you can understand why 2015 was an exciting year for Lehigh Valley sellers and Realtors.
The year 2015 also was a great time to be a real estate buyer in our region.
Inventory dropped only 5.7 percent over the last 12 months (which history has shown is consistent with past trends). Months’ supply of inventory hovered at six months, indicating a balanced market with a good equilibrium of buyers and sellers. And the housing affordability index rose 3.1 percent, meaning more people can afford houses in the area.
According to industry experts, the pent-up demand for buying in recent years finally broke out in a meaningful way in 2015, fueled by sustained job growth in many parts of the nation and rising home values giving more homeowners the incentive to sell (both of which were true in the Lehigh Valley). It is a trend expected to continue in 2016.
But rising mortgage rates and supply constraints are two likely roadblocks that have the potential to slow the pace of sales from being even more robust.
Rising interest rates has been expected since mid-2015, and although we kept being pleasantly surprised, we now expect mortgage rates to gradually move upward toward 4.5 percent by the end of 2016. (Just last month, the Federal Reserve raised its interest rates.)
Supply will be an issue in 2016, as well. It’s predicted that new-home construction will be insufficient to keep up with demand. This may, unfortunately, inflate prices for some homebuyers unnecessarily.
