If 2018 was a year of drama — a steep rise in housing prices and scary decline in inventory — 2019 has proven to be a year of steady growth.
That has led the Lehigh Valley, and the country, to record median home prices.
In June, the median home sale price was $216,500 in the Lehigh Valley, according to the Greater Lehigh Valley Realtors group, and $285,700 nationally, according to a report from the National Association of Realtors. Both groups reported these as all-time highs.
The last time prices reached near this level was in July 2007, when the median price was $215,000, according to GLVR data.
July prices, as they often do, could top out the year at another record before the typical late-summer slowdown. Regardless, local real estate agents say, this is simply a continuation in the trend of slow and steady economic progression that, unlike the rapid expansion before the Great Recession, is unlikely to spell doom when it inevitably slows down.
"We can't go on like this forever," said Sean LaSalle, an associate broker with Berkshire Hathaway.
After a 10-year run of gains in an economy in which real estate cycles typically last seven or eight years, the slowdown is coming, but definitely not this year, agents say.
Brad Patt, senior vice president of Berkshire Hathaway HomeServices Fox & Roach Realtors, predicts this market strength is likely to continue into 2020. LaSalle's prediction goes as far as 2021.
Their predictions are bolstered by strong employment and historically low mortgage rates, as well as inventory that continues to shrink year-over-year as homes continue to sell quickly.
Housing inventory was down 16% from last June in the Lehigh Valley and new listings down 13%. But pending sales rose nearly 8%, and those homes are staying on the market for an average of just 32 days.
"It's tough to gain a supply of inventory when things are selling quickly," GLVR President Carl Billera said.
The lack of new listings was noticeable this spring, when agents were hoping for the usual listing binge that typically occurs when the weather improves.
"We definitely didn't have that huge insurgence of new listings," Billera noted. But "we're not falling off a cliff."
Though supply is still a concern, agents are very deep in a seller's market, with only 2.4 months of inventory in June. The fact that closed sales have inched up 1.3% since the beginning of the year and prices 1.7% means the region is pacing itself, Patt said.
"That's responsible growth that can be sustained," he said.
The nation's median price increased 4.3% from last June and marks the 88th straight month of year-over-year gains. In the Lehigh Valley, the median sales price is 5.6% higher than last June, the kind of single-digit growth the region has been seeing all year.
For comparison, in 2018 there were months where year-over-year increases in home prices were double digits, over 17% in March and 10% in July.
Though the market is less volatile this year, the home selling game is still intense. The one statistic that has gone virtually unchanged from 2018 to 2019 is how much of the listing price a seller is receiving on average. In June, as in June 2018, that was 98.6%.
"I'm swamped," LaSalle said.
But he said he's beginning to see harbingers of change elsewhere. Some areas of Hunterdon County, New Jersey, are seeing inventory levels climb and the housing market beginning to struggle.
LaSalle points in particular to Raritan Township, where the supply of inventory is six months, compared with less than three just last year.
"That's a concern because usually what happens is it eventually comes to Lehigh Valley," he said, though this could still be two years away.
That would be good news for buyers, but the beginning signs of a weakening market.
Though low inventory is an indicator of strong market conditions, the Lehigh Valley's inventory remains unusually low. Nationally, National Association of Realtors' chief economist Lawrence Yun has called it a housing shortage, with the greatest discrepancy between supply and demand persisting for mid-to-lower priced homes.
In the Valley, the Housing Affordability Index — a measure of how easily the median income can afford the median price home — ticked down 2% from last June, but that is an improvement over 2018's consistent double-digit year-over-year decreases in this data point.
Billera would summarize the year as fairly uneventful, but he said, "That's not a bad thing, sometimes."
