RISMEDIA, Oct. 11, 2007-(MCT)-The average price of an existing home in the Lehigh Valley, Pennsylvania, fell last month for the third time this year, while the number of homes sold fell for the 16th consecutive month.
At the same time, the number of homes coming on the market rose 11% in September, according to statistics from the Lehigh Valley Association of Realtors.
Prices for existing homes in Lehigh and Northampton counties fell 1.8% in September to an average of $217,000, compared with the same period last year. The number of homes sold fell 18%, year-over-year.
Home prices in the Valley have likely reached their peak for the year. The monthly market report the LVAR released this week shows average home prices in September fell compared to August.
September’s results show a strong continuation of the slowing trends that began last year. The outsize increases in prices and the fast pace of sales that became common during the boom years of 2004 and 2005 are now a thing of the past.
Economists note that while the volume of transactions has dropped precipitously this year, the value of homes here remains strong. That’s good news for the vast majority of homeowners in the Valley who don’t need to sell their homes.
“It is not like a perishable good. If you don’t sell your home, it will not go bad,” said Bethlehem economist Kamran Afshar. “If you are not selling, the price change is a paper change.”
Experts have also said the slowing market has provided a needed correction to the excesses of the boom years, in which buyers had little power to negotiate. The large number of homes listed for sale this year has provided prospective buyers with lots of choices, and the ability to reject many of the properties they see.
According to LVAR, which does not distinguish between new listings and re-listings, the number of homes listed for sale in the first nine months of the year — 13,915 homes — has surpassed the amount of new listings in all of 2005.
All year, real estate agents have told homeowners that their houses need to be priced correctly and in top-notch condition to sell because of the large inventory of homes for sale. Now a tightening of borrowing standards has served only to further reduce the relatively small pool of buyers in the market. As foreclosures have increased, buyers with shaky credit histories are no longer qualifying for mortgages.
“Sellers can no longer be reluctant to accept offers or reduce prices,” wrote Jeffrey Burnatowski, a real estate agent with RE/MAX Real Estate in Allentown, on a blog he publishes.
He added, now is “not the time to hold out for the ‘best’ price possible.”
Statistics provide a mixed outlook for the market. Pending sales contracts, an indication of future sales, hit the lowest level all year in September. That suggests the sluggish rate of sales will continue.
But while home sales have stalled, the Lehigh Valley’s housing market remains strong compared with other areas. Increases in prices in the Lehigh Valley during the second quarter outpaced the state and national rates, according to statistics from the Office of Federal Housing Enterprise Oversight.
On average, homes prices remain up, albeit modestly, compared to last year. In September, fewer high-end homes — whose sales have boosted the average — sold, which may account for the decline in the average price. Twelve homes with sales prices of $500,000 or more sold last month, about one-third of the amount that sold in August. The lull in sales and the slower rate of price increases comes after blockbuster years in which low interest rates and an influx of people from New York and New Jersey brought new buyers into the market and sent prices soaring. Last year was the fourth consecutive year that prices for existing homes in the Valley climbed by double digits.
Some real estate agents say the influx of buyers from the east has begun to slow. That’s because homes in New York and New Jersey are sitting on the market longer, and high gas prices and the lengthy commute are deterring some prospective buyers.
Copyright © 2007, The Morning Call, Allentown, Pa.
Distributed by McClatchy-Tribune Information Services.