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Low inventory continues to drive up home prices
Stacy Wescoe//September 13, 2023//
Listen to this articleHome prices in the Lehigh Valley are still hovering at record highs.
With low housing inventory driving price increases, the Greater Lehigh Valley Realtors are reporting that the median sales price for a home in the Lehigh Valley in August was $331,750. That is still lower than the record high in June, which was $335,00.
Justin Porembo, CEO of the GLVR, said new housing construction would help ease the problem.
“Economists have been calling on the new-home market to make up for the supply deficits in the real estate market,” said Porembo. “It is critical to expand supply as much as possible to widen access to home buying. Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home price appreciation outpacing income growth.”
In addition to needing expansion – and affordability – in the new-home market, higher mortgage rates are also creating a standstill in the local real estate market, according to GLVR President Howard Schaeffer.
“Higher mortgage rates are having a so-called ‘golden handcuff effect,’ discouraging homeowners who locked in low rates a few years ago from selling,” Schaeffer said. “This has created an inventory logjam in the housing market. 82% of home buyers say they feel ‘locked in’ by their existing low-rate mortgage, according to a survey from realtor.com. While significant movement toward the ultra-low 2% or 3% averages are not expected over the immediate horizon, the National Association of Realtors forecasts the 30-year fixed-rate mortgage could reach 6.4% by the end of the year, followed by 6% in 2024.”
Sales were down, but so was housing inventory. The GLVR reports that closed sales dipped 16.6% in August, while inventory slipped 34.8%.
There were only 588 housing units on the market in August for Lehigh and Northampton counties and new listings dropped 12.1% to 703.
Homes sold in 15 days on average and the percentage of list price received increased 1.2% to 102.4%
In Carbon County, the Median Sales Price increased to $250,858. Closed sales dipped by just six listings, coming in at 62.
