Lehigh Valley home sales continue to cool

Affordable housing remains obstacle for many in area

Affordability continues to be a problem for potential homebuyers in the Lehigh Valley, as prices and mortgage rates continue to rise.

The latest statistics from the Greater Lehigh Valley Realtors show that closed sales in October dipped almost 30% from the previous year to 574 listings. The median sales price is up 14% over the year to $296,500, though it is down from $315,100 in August.

According to Bankrate, the current average rate for the benchmark 30-year fixed mortgage was 7.32% as of Sunday, up 15 basis points over the previous week.

The Greater Lehigh Valley Realtors’ affordability index was at 77 for October. It has been dropping steadily over the year from 128 in October 2021. The index measures housing affordability for the Lehigh Valley. A score of 77 means the median household income is 77% of what is necessary to qualify for the median priced home under prevailing interest rates.

“The housing market is undergoing a major shift, and affordability continues to be an obstacle for buyers and sellers,” said Greater Lehigh Valley Realtors CEO Justin Porembo in a statement. “Mortgage rates have doubled since March and home prices remain elevated due to a limited supply of homes, although price gains are slowing at a quickening pace.”

Porembo said many homeowners are waiting until market conditions improve to sell their home, while other sellers are increasingly cutting prices and offering concessions to attract a greater number of buyers. Rentals, too, are having to do the same, he said.

A telling statistic was that the percentage of list price received was 101%, which means it’s still a sellers’ market, but it was down 0.7% over the year. That number means that most buyers are still purchasing homes above the list price.

The average number of days on the market was 18 days, which is up from last year, and this past summer when the average was 12 days in June. New Listings slipped 17.5% to 698 and pending sales were down 25.4% to 580.

Greater Lehigh Valley Realtors President Howard Schaeffer said the market is continuing to correct itself.

“We talk about the housing market cooling, and many people want to assume we’re headed for a bubble and back to 2007-2008, but this is a different market, these are different circumstances, and we’re actually headed in a healthier direction,” Schaeffer said. “We are now, on average, seeing 2.5 offers for every seller versus the all-time high of 5.5 offers for every seller. This is much healthier, because buyers aren’t spending just 10 minutes in a property — while an Open House line snakes around the block — and feeling pressured to decide on what could be the biggest purchase they may make in their life.”

Nationally, existing home sales were down 1.5% in September, according to the most recent numbers from the National Association of Realtors. The drop is the eighth consecutive month sales fell.

“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%,” said National Association of Realtors Chief Economist Lawrence Yun. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”