Near-record snow can’t cool Lehigh Valley’s hot housing market

Paula Wolf, Contributing Writer//March 1, 2021

Near-record snow can’t cool Lehigh Valley’s hot housing market

Paula Wolf, Contributing Writer//March 1, 2021

Ignoring near-record snowfall in the Lehigh Valley, home sales kept their up their torrid pace, increasing 8.9% from January 2020 to January 2021.

Last month, 515 houses sold in Lehigh and Northampton counties, up from 473 a year ago.

It’s too bad real estate agents can’t take the heat from the market to melt the snow, said Tim Tepes, 2021 president of Greater Lehigh Valley Realtors, the trade association that compiles monthly and other statistics.

Snow shovels have become necessary equipment for showings these days, he said. “The market is really strong.”

January started off with healthy buyer demand and market fundamentals, Greater Lehigh Valley CEO Justin Porembo said in a release. Combine that with mortgage interest rates setting record lows and the drive by many buyers “to secure a better housing situation – in part due to the new realities brought on by COVID-19 – (and) our market is experiencing a multiple-offer frenzy not normally seen this heavily during the winter months.”

In addition to a healthy increase in final sales, pending sales (a sign of future activity) rose 3% in January, to 592; median sales price jumped 27%, to $234,900; and the percentage of list price received grew 2.4 percentage points, to 99.8%.

On the inventory side, new listings dropped 10.2 percent to 590. Inventory overall remains very low, shrinking sharply 56.3 percent in January to 567 units, leading to a months’ supply of inventory of just 0.8 months. Days on market in January was 22, 46.3% less than the 41 in January 2020.

This mirrors trends across the country. Existing-home sales continued to increase in January to a seasonally-adjusted annual rate of 6.69 million, up 23.7% from one year ago, according to the National Association of Realtors.

Meanwhile, the U.S. median existing-home sales price rose to $303,900, 14.1% higher from one year ago, and housing inventory skidded to an all-time low of 1.04 million units. The inventory slippage of 25.7% year-over-year is also a record decline nationally.

Tepes said it’s frustrating for entry-level buyers to prequalify for a mortgage but not be able to find a house. A home put on the market may receive four or five offers in just the first day, he said.

In a recent seven-day period, 145 houses were listed but 216 became pending sales, Tepes said. That’s great for the seller – until that seller becomes a move-up buyer dealing with the same inventory shortage as other buyers, he said.

New construction could help temper the shortage, but only so much.

“A robust increase in housing starts in December points to an active year for new construction, but higher material costs, especially lumber, and a limited supply of buildable lots will temper the number of new units,” Tepes said in a release.

“As we look to 2021, signals suggest buyer demand will remain elevated and tight inventory will continue to invite multiple offers and higher prices across much of the housing inventory. The new construction mentioned is welcome and exciting but also not quite enough to change the inventory narrative through the coming year.”

(Greater Lehigh Valley Realtors also covers Carbon County. There, in January 2021, the median sales price increased to $175,000, closed sales were 59 and pending sales decreased to 62, a difference of five from the previous January. New listings fell to 54, inventory dropped to 102 units, leading to 1.3 months’ supply of inventory. Days on market “are moving much faster for the association’s more rural county,” the release noted, with that measurement dropping 44% percent to 47 days.)