Pocono real estate market shows recovery
The real estate market appears to be recovering in Monroe County, Pa. Home values are up and days on market are down. Most Realtors in the area, say that the tight inventory is actually the most challenging thing they are facing today.
According to Pocono Mountains Association of Realtors executive Nicole Murray, there were 28 closed properties in all of 2019 that were tagged as "short sale" and there are currently 17 active short sale listings in the Multiple Listing Services (out of 1059 listings) at the time of this story.
"Looking at the number of bank owned properties sold through the MLS, last year was the first year since 2006 that we had less than 10% of the annual sales marked as foreclosures," Murray said. "To put that in perspective, 40% of the annual sales in 2015 were marked as foreclosures."
Buyer demand continues to be strong but with tepid seller activity still in many locations, total sales are lower than they would normally be in a more balanced market, Murray said. While up from recent lows a few months ago, mortgage rates end the year close to three-quarters of a percent lower than a year ago, helping to improve affordability and offset rising home prices.
"We start off the year with continued low interest rates, low unemployment, and rising rents nationally," said Murray. "These factors should encourage healthy buyer demand and sets us up for a strong start to the 2020 housing market and a lot of optimism for the coming spring market."
"The fact that interest rates remain historically low along with inventory, I feel that demand will continue to be strong market in 2020," said John Rutkowsky, Jr, President of PMAR.
For 2020, National Association of Realtors Chief Economist Lawrence Yun sees good news for home prices. "National median home price growth is in no danger of falling due to inventory shortages and will rise by 4%," Yun said. He is also expecting the new-home construction market sales to increase 10%. Yun and others would like to see home builders bring more affordable units to market to help ease shortages and slow price gains in that segment.
Don Hannia, Broker for Spread Eagle Development Corporation and Life Director of the Pennsylvania Builders Association, claims new home construction has been on the rise in the Pocono Region for the past several years. He attributes the growth to customer confidence in the improved national and regional economy.
"Strong equity growth in their existing homes, strong growth in 401K and other retirement/investment accounts and strong employment have provided a foundation on which customers feel they are financially prepared to purchase a new home", Hannia said.
Hannia said the existing market in the region has improved to where price appreciation and low inventory can be seen. This shrinks the price disparity gap between new and existing homes markets.
"We project that this new home construction growth cycle trend will continue beyond the next five years and offer tremendous consumer choice to those in the real estate market wanting the personalization and customization that comes with new home ownership." Hannia said.
Loren Keim is the Broker and President of Century 21 Keim Realtors. He opened an office in East Stroudsburg in 2015 and employs 25 agents. Keim cites new hospitals in the area behind better employment opportunities, which improve the real estate market.
"We are finally in an upward swing, where it has improved significantly in the past two-three years," said Keim. "The problem in Monroe County has always been lack of significant jobs."
"Hospitals and ESU hiring numbers bring more permanent jobs, which also then bring in other stores and entertainment type businesses." Keim said.
Having offices in the Lehigh Valley area, Keim said the sales volume in the Poconos was up 12.5% last year compared to only 1.7% in the Lehigh Valley area. He attributes this to the lack of inventory down in the Lehigh Valley versus the Poconos, where inventory is higher.
According to Spiros Bilianis, Coldwell Banker Commercial Pennco Real Estate and past PMAR president, experts haven't seen any large demand on office space. They are seeing a large demand on industrial/warehouse space.
"Commercial lending rates are still very good and multifamily demand is strong," Bilianis said. "Renovations and new construction in the hospitality industry is especially strong — indicating disposable income within a two-hour drive time from the Poconos has fueled the increase."
Becky Freeman has been a realtor and broker in Monroe County for almost 30 years. She has been through the ups and downs of the market and claims 2019 has been her best selling year since 2005.
"The best of times in the business were between 2004 and 2005," said Freeman. "The worst of times was 2006-2008, where it rock-bottomed. Improvement didn't really come till about 2017."
Lower interest rates are making mortgages more affordable, offering more opportunities with zero to low money-down loan options such as FHA, USDA, conventional and VA loans explained Freeman. She has experienced an upswing in VA loans which are $0 down mortgage loan options for Veterans and service members.
"There are many young veterans that are getting back on their feet and are now able to afford to buy," said Freeman. "It's such a great feeling to be able to work with veterans and find them a home."
Freeman described the majority of her buyers as first-time homebuyers and over 70% of her sales are NY/NJ commuters that can't find or afford a home there. She feels Stroudsburg's surrounding area came back quicker because of the proximity to Interstate 80, but she has also seen an uptick in the West End area from commuters coming from the Lehigh Valley area.
"This is a seller's market, where you have to go full price or over, because we are getting multiple offers so quickly," said Freeman. "Last year, if you had a house on the market for two weeks, it was a long time."
The rental market in Monroe County remains tight. Freeman claims fewer inventories drive rents higher, often making a home purchase a more affordable option.
"The economy has really taken off, people have more jobs making more money, they feel more relaxed and confident about the economy," said Freeman. "They feel that they are doing so much better."