Median home price in Lehigh Valley hits record high

June is usually a hot month — for both the weather and the housing market.

This June, however, broke records.

The median price of a Lehigh Valley, Pa., home hit a record-high $225,000, surpassing the last peak in home prices when the housing bubble burst in 2007, according to data released by the Greater Lehigh Valley Realtors Group.

The median price shot up 12.6% from June 2017, when the figure was $199,900. And it's the steepest price recorded in the Lehigh Valley by Loren Keim, president of Century 21 Keim Realtors, who conducts market research for Lehigh University.

It's the latest in the saga of a market squeezed for inventory, aided by an improving economy and lower unemployment rates — and experts say it hasn't yet reached its peak.

Despite a slight bump in inventory since the spring, the area home supply has been hovering at its lowest levels since before the housing bubble. In the Lehigh Valley, there were just less than 1,600 available homes in June, which is about half the inventory at this time two years ago. In 2007 and 2008, those levels were in the 4,000 to 5,000 range, according to historical data from the Realtors group.

Lehigh Valley, Pa.
View of Jim Thorpe from Flagstaff Mountain, Pennsylvania.

"We're continuing to see a sellers' market," said Brad Patt, senior vice president of Berkshire Hathaway HomeServices Fox & Roach Realtors. "I don't see the market conditions changing for the remainder of 2018."

In response to the scarcity, buyers are increasingly pushing the envelope with their offers. The percentage of the listing price that sellers receive from buyers continues to inch up, reaching 98.3 percent last month.

Area real estate agents report seeing almost all offers at or above listing price, and some going forward without common contingencies such as home inspections.

"To keep the terms as clean as possible — that's happening a lot," said Carl Billera, the Realtors group's president-elect and a managing partner with Better Homes and Gardens Real Estate Valley Partners.

This might mean a tougher time than usual for first-time buyers, but the significant appreciation of home values in general means buyers and sellers can take advantage of stronger home equity, Patt said.

"It is a very strong market to fulfill the consumers' goals," he said.

The average time a home spends on the market in the Lehigh Valley is still falling, now at just more than a month. This figure — 35 days — is also comparable to the boom years of 2005 to 2006, according to the Realtors group data.

Though the median sales price is one indicator of a competitive market, Keim cautions it should not be taken as entirely representative of a region with a wide variety of market conditions.

"A rancher in Parkland is selling in a minute and a half, but luxury properties are still not at the level they were in 2005 to 2006," he said.

Further, median sales price is not a metric Keim uses to determine market peak. He looks at home sales, which are significantly down: year-to-date in June, there were 3,644 closed sales, compared with 5,098 in 2005.

Keim estimates it will be another two years before the market truly reaches another peak.

And while the Lehigh Valley is seeing record prices, it pales in comparison to markets such as San Francisco and San Jose, Calif., where booming technology hubs have helped push median home prices past $1 million.

With the spike in sales prices comes a dip in the Realtors group's housing affordability index, which in June stood at 138 — meaning median household income is 138 percent of what is necessary to qualify for the median-priced home under current interest rates. That's a decrease from 165 a year ago.

But buyers and sellers in this season are seeing some conditions level out in their favor. Mortgage rates have steadied since April, with the 30-year fixed-rate average drifting between 4.53% and 4.66% according to the latest figures from Freddie Mac.

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