Zillow: Cost may increase 6.8% more

Lehigh Valley facing challenge of affordability

Homebuyers in the Lehigh Valley are already experiencing sticker shock, and it won’t get better any time soon, according to Zillow’s latest home value and sales forecast.

The real-estate marketplace company said the Valley will see home prices rise about 6.8% between now and July 2024.

Nationally, Zillow says the U.S. market will see a 5.8% increase by the end of the year and a 6.5% increase by next summer.

Zillow, which said prices may have bottomed out earlier in the year, revised its numbers upward for this report because of tight inventory conditions that are placing upward pressure on home prices despite affordability challenges.

“Just over half as many homes were listed for sale in July compared to the same month in 2019, and 29% fewer new listings entered the market in July than what was typical this time of year prior to the pandemic,” Zillow said in the report. “This shortage has buoyed competition for the homes that are for sale.”

The Lehigh Valley’s median sales price for July was an 8.5% increase over July 2022, according to the Greater Lehigh Valley Realtors.

“Despite a drop in home sales, home prices have remained near record highs, with a Lehigh Valley median sales price of $325,500, 2.4% below the all-time high of $333,500 recorded in June 2023,” GLVR President Howard Schaeffer said. “With only 1.1 months’ supply heading into August, the lack of inventory has boosted competition among buyers and put upward pressure on sales prices, especially in more affordable markets like the Lehigh Valley, where competition for homes remains particularly strong.”

The Zillow report jibes with an earlier report from Morningstar, which says the Lehigh Valley is among the top 15 real estate markets in the country with the least chance of a correction in upcoming months. A correction happens when prices become too high to sustain and start falling to better meet supply and demand.

Another indicator that the Valley is a competitive market is the inclusion of the Nazareth-based 18064 ZIP code in the 2023 “hottest ZIP codes” list by Realtor. com. It ranked fifth a year after Bethlehem’s 18017 was sixth on the 2022 list.

The GLVR July report found that closed sales were down 32.6% to 528 listings, while inventory was at 589, a drop of 37.1%. New listings fell 21.2% to 693. The average number of days a house is on the market was 15, compared with 13 in July 2022.

As for keeping up with the demand, the Lehigh Valley Planning Commission said about 2,800 residential units were included in new development through the first half of the year. Of that number, 433 were single-family homes, 603 were townhomes, 222 were twins, 63 were manufactured homes and 20 were condominiums. The rest were apartments.