Are bidding wars over Le­high Val­ley homes on the de­cline?

The Morning Call - - NATION & WORLD - By Kayla Dwyer

Last year, the battle for the bid, the guer­rilla war­fare over the Le­high Val­ley’s dwin­dling supply of mid­dle-priced homes, was a pub­lic spec­ta­cle.

Buy­ers and sell­ers blinked in shock at the rate homes flew on and off the mar­ket, those priced $150,000-$300,000 sell­ing like hot cakes to the best of eight, 10, even 12 bid­ders.

Na­tional sur­veys show these bidding wars have largely sub­sided. Redfin agents this July re­ported only 11% of their offers ended in bidding bat­tles, com­pared with 45% in July 2018. In March, Redfin agents re­ported 16% of offers land­ing in such bat­tle­grounds, a dras­tic drop from 61% the pre­vi­ous March.

Though there is no lo­cal data avail­able to defini­tively com­pare, anec­do­tal ac­counts show that in the Le­high Val­ley the bat­tles rage on, but more qui­etly.

The con­di­tions re­main ripe for bidding bat­tles. In­ven­tory has con­tin­ued to de­crease, by 10% from April 2018 to April 2019, and by 18% from July to July, ac­cord­ing to mar­ket re­ports from the Greater Le­high Val­ley Re­al­tors Group. This July, houses only re­mained on the Le­high Val­ley mar­ket for 27 days on aver­age — a record low for the re­gion.

And just like they did last spring, houses are sell­ing for about 99% of their list­ing price.

The pro­por­tion of homes that re­sult in com­pet­i­tive offers is vir­tu­ally un­changed in the Val­ley, lo­cal agents say. If there is any dif­fer­ence, it’s in the na­ture and depth of the com­pe­ti­tion.

“Buy­ers are just frus­trated,” said Tim Tepes, co-owner of Le­high Val­ley-based As­sist 2 Sell Realty. “They don’t want to get in­volved in a bidding war be­cause it’s just a pain.”

Af­ter a year of hype, he said, his buy­ers know the deal. They’ll see a prop­erty that’s ad­ver­tis­ing an open house but not al­low­ing show­ings un­til then — a com­mon way to drive up in­ter­est and price — and not even con­sider it. They’ve learned that by the time they show up at that open house, oth­ers will have stormed it, and a mys­tery buyer might have al­ready made an of­fer site-un­seen.

Mike Ber­na­dyn, an Al­len­town agent with Re-Max, said he’s seen

a sim­i­lar dy­namic among his clients.

“They’re afraid of the stigma of last year, pay­ing $20,000 over list price,” he said.

As a re­sult, the bidding wars of late in­volve fewer play­ers — maybe two to five offers in­stead of eight to 10 — who are “putting more skin in the game,” Ber­na­dyn said.

Last year, the price was right. This year, the em­pha­sis is on the terms, in his ex­pe­ri­ence: putting up $5,000-$10,000 in an earnest money de­posit rather than $1,000, and per­haps waiv­ing in­spec­tions.

Tim Ma­hon, an as­so­ciate bro­ker with Keim Re­al­tors in Beth­le­hem, said a client re­cently bought a home in Palmer Town­ship listed at $219,000 that had mul­ti­ple offers on it, af­ter look­ing at nearly 20 homes across sev­eral mu­nic­i­pal­i­ties over the last three months.

His of­fer only came in $200 above the ask­ing price. But he wrote a nice let­ter.

“You never know what works; you just make sure you try every­thing,” Ma­hon said.

Tepes said he still sees buy­ers, young and old, mov­ing in with their par­ents while wait­ing for their dream home in or­der to avoid hav­ing a home sale con­tin­gency. One of his clients who used this strat­egy was a cou­ple in their 60s who moved in with their par­ents, who are in their 80s.

For sin­gle-fam­ily homes less than $300,000, Ma­hon said, he con­tin­ues to find him­self in mul­ti­ple-of­fer sit­u­a­tions on both sides of the ta­ble at a rate in­dis­tin­guish­able from last year. A $210,000 house in White­hall Town­ship will still sell in one day, he said.

Sta­tis­tics bear out the dif­fer­ence be­tween the Le­high Val­ley and the broader na­tion. Na­tion­ally, ac­cord­ing to the Na­tional As­so­ci­a­tion of Re­al­tors, closed sales were down about 2% in June from the year be­fore, while in­ven­tory was vir­tu­ally un­changed. This im­plies fewer buy­ers hon­ing in on the same num­ber of homes.

In the Le­high Val­ley, ac­cord­ing to GLVR data, closed sales were un­changed in June while in­ven­tory plum­meted by more than 16%. That’s the same buyer ac­tiv­ity com­pet­ing for fewer homes.

Sean LaSalle, an as­so­ciate bro­ker with Berk­shire Hath­away, es­ti­mates that nearly 40% of those mid­dle-priced homes end up with mul­ti­ple offers, even in these sum­mer months that are his­tor­i­cally slower paced.

A mem­ber of his team re­cently sold a $200,000 home with five offers in less than a week, for ex­am­ple.

The Le­high Val­ley is fre­quently be­hind na­tional trends de­ter­mined by pace-set­ter cities like Mi­ami, New York City and San Fran­cisco. Mar­ket forces tend to hit the re­gion later and with less force.

“What nor­mally hap­pens in those ar­eas eventually comes down to the lower-priced homes, in places like the Le­high Val­ley,” LaSalle said. “It’s al­ways a trick­le­down ef­fect.”

Thus the na­tional slow­down re­flected in bidding-war re­ports is bound to hit the Le­high Val­ley mar­ket soon, LaSalle points out.

It’s like he has said be­fore: “It’s not go­ing to last like this forever.”

SEAN LOCKE/DREAMSTIME

The pro­por­tion of homes that re­sult in com­pet­i­tive offers is vir­tu­ally un­changed in the Val­ley, lo­cal agents say. If there is any dif­fer­ence, it’s in the na­ture and depth of the com­pe­ti­tion.

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