End of Year Summary: 2015 Lehigh Valley Market.

I hope this post finds you well in 2016. If you have a moment and like consistent Lehigh Valley Real Estate related news, take some time to like my Facebook page, please. 

2015 was a good year for the housing market. The supply continually went down and I believe this should have upward pressure for prices in 2016.

 

Reaction: These statistics are comparing Dec 2014 to Dec 2015, Month Over Month. Though it would be impressive if the change in closed sales were also positive, that goal is difficult with there being less homes for buyers to choose from.

I. GLVAR Report: Please Click Here for the Report.

A) Averages Sales and Pended Sales

 Reaction: The average sale prices performed well in 2015 Southern Lehigh and the Allentown School districts had the highest price appreciation. Over the course of the year, there were 16.6%  more homes sold than the previous year. This did not come at the expense of home prices --- that is a strong indicator of demand. Meaning, no sales were needed to help sellers move!


B) December Pended Units --

 

Reaction: Why so many sales in this month to month comparison? It could be because people wanted buy a home before the Federal Reserve raised rates. It could simply be that people are ready to buy -- I do not believe there is an exact reason. The threat of raising rates has been trailing the house market for a long time.

C) Optimism for 2016

There are not a lot options for buyers going into 2016 --- this looks auspicious for home prices, especially the Median and Average Sale metrics. The emphasis of this chart is to show how many homes are currently on the market. Clearly, there are very few.

D) Lender Mediated Activity (optimism part 2)

Here is the 2014 synopsis for Lender Mediated properties:

Here is the synopsis for 2015:

 

Comments: Feel free to download the picture if its difficult to see.  The market share of lender mediated homes in 2014 was 10.8% and in 2015 it was 10.2%. A slight decrease is good, but the trend to watch going forward is: are foreclosed, short sale and other distressed properties ceasing to be drags on the average price of homes in the Lehigh Valley?

2014: Average Sales price was -8.2% 

2015: Average Sale price increased 1.5%

While statistics can fluctuate as an outlier over a year's time frame, it is still a trend to watch. If foreclosed properties continue to appreciate, this could be a good litmus to follow for 2016.

 II. Zillow Report. Please Click Here for the Report.

The ZHVI is an aggregate analysis of all homes listed and not listed homes for which Zillow assigns a value. It is an interesting method to follow price trends because it attempts to block out sample size bias. It is up 2.3% and 2.7% for Northampton and Lehigh County.

Negative equity continues to decrease as does the foreclosure rate. The lower these rates go, the stronger pool of homeowners becomes.

Black Friday Market Update, Nov. 2015.

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I hope this blog finds you well. I'll go over some thoughts on the national market, then the Lehigh Valley MLS and Zillow Report. Scroll to the bottom to see how many years you have to live in the Vally to own vs rent.

1. Some general thoughts about the National market:

T1: "A Fed rate hike in December is "pretty much in stone," said the head of strategy at RBS, adding the futures market is pricing in three rate hikes by the end of 2016, despite promises of a slow path higher." - CNBC.com, around Nov 17th.

T2:

 

T3:     Performance of the XLF index fund which tracks banks. The price is at 24.51, which is close to its 52 week high. It seems people are believing in the banks; it might be simple

Thoughts on the national Market:

2)MLS Lehigh Valley MLS

 a)

September 2015 Update

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As November begins, the Lehigh Valley Housing Market seems to be growing stronger. While we did not have a rate hike at the Federal Reserve last month; many, including Carl Icahn, think that it would be better if the economy had one. Oil prices have remained low and that is good for the stability of the American Consumer. 

The Market Update for the month of October has not been released yet, so these are the metrics from September.

I) As for the Lehigh Valley: The Lehigh Valley Association of Realtors Report indicates:

Recap:  Lower Inventory and increased Closed Sales. Median Sales Price had a bad month.

A) New Listings and Pended Sales

Reaction: I find it intriguing that the amount of listings are consistent from year to year. Pended Sales are up an outstanding 17.9% despite the amount of listed homes remaining impressively static.

September in particular furthered the pended listing momentum by  seeing pended sales up 20%

I do not expect to see such a large increase next year as I believe the market is hitting equilibrium.

B) Median Price:

Reaction: For the Month, Northampton and Lehigh County did poorly in terms of Median Price. Median Price is up 2.4% for the year -- I do not believe the monthly overview is much to worry about.

C) Days on Market

Reaction: Less is more in this case. I believe  the narrow range of DOM is likely a healthy indicator for the market.

D) Top 3 Performance by School district by average sales price Year To Date

1. Southern Lehigh +11.7%
2. Northampton 11.3 %
3. Allentown 7.3 %

II) Zillow:

In the below charts it seems that the Hanover twp and the Easton Area is leading the way in terms of YoY returns. The forecast is for another 1.6% price growth.

Conclusion: The Lehigh Valley seems to have steady and consistent growth. I hope to see this continue, I do not expect the pended sales to keep trending so dramatically

 

Monthly Market Update. August's Update, July's statistics.

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Heading into the end of 2015, and going toward 2016, I do wonder what will happen with Interest rates. I wonder how they will affect buyers. Will they even go up? With the Chinese Yuan being devalued last week that could delay a rate increase. I think they could temper Average Sales price; however Supply and Demand are important, and these metrics are pretty solid for the Lehigh Valley in recent months. I think the effects of higher rates will be interesting and I hope they will be mild.

I think a headwind that is not discussed enough with housing is wage growth. People cannot spend what they do not make and if wage growth remains stagnant it is an inherent headwind to home prices increasing. Maybe rising interest rates will signal higher wage growth?

Anyway, to the numbers,


I. The Lehigh Valley Association of Realtor's Report for July. Click Here to see the Full PDF

Reaction: Closed Sales are up  substantially. The inventory is down greatly. The number of Listings year over year has been consistent but the rate at which homes are selling has increased -- it seems to be furthering the momentum of the Lehigh Valley Housing Market.



1. Listings YTD for the past 3 years

Comments: The incoming supply of homes has been relatively flat year over year.


The nice part is in the next section:

2. Pending Sales:

Comments: Its hard to beat  a 19.6% increase in Pended sales. As this continues, it should strain prices higher.


3. Average Days on Market:

Comments: Despite the increase in buyers, the Days on market has remained stagnant. I'd like to see this decrease.

4. Average Sales Price.

This is a good thing :)

5. And this is better. Inventory of homes have declined.

Top Five Risers in Average Sales Price by school District:

1. Northampton
2. Southern Lehigh
3.  Bangor
4. Allentown
5. Easton

II.             Zillow's Report

Comments: Zillow's report is Negative compared to LVAR's report. Zillow ascribes a Zestimate to each home and it updates differently than the Realtors report. Zillow Explanation of Zestimates.

July 2015 Lehigh Valley Market Update

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The Lehigh Valley is continuing its positive momentum at a healthy pace: as rhythmic as a John Bonham drum beat.

Lehigh Valley Association of Realtor Report.

 All of these metrics are good -- lets delve deeper.

a) The Amount of Closed Sales: Up 12.7% YTD compared to last year -- month over month 15.6%

b) There are more homes settling for more

Reaction: Average Sale Price for the year went down a little from this month as compared to last month. However, more homes settled so there is a larger pie being shared. I think the price increase is a healthy amount and it helps people continue to dig out of their negative equity.

c) Pended Sales: The future looks good.

Reactions: Look out below its a huge tower of Under Contract homes.

School Districts: Top Three Risers In Average Sales Price-

1) Northampton up 22.8%
2) Southern Lehigh 13.4 %
3) Bangor 9.2%


Zillow Update.

This report is slower to update than the LVAR report. For May 2015 -- the numbers continue to improve. Negative equity continues to decrease and average sales price keeps growing.

Market Update June 2015

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This month the only report I have to cite is the Lehigh Valley Association of Realtors version. Zillow did not provide their report for Allentown at the time of this post.


May was like the American Pharaoh of months, May had a perfect sweep of the metrics like the Triple Crown winner had a perfect sweep of the races.

May was an awesome month for the housing market.

I. Lehigh Valley Association of Realtors -- Report.

1. The Main Metrics

a) New Listings

Reaction: Buyer's have less choices for homes at the moment. As this trend continues, this puts pressure on prices to go up. The percent decrease is a healthy one in my opinion as its not too dramatic.


b) Closed Sales

Reaction: The amount of sales are up 10.5 % for the year but down -2.8% Month to Month. The month over month number does not trouble me because the Pended Sales are doing quite well.

c) Pended Sales.

Reaction: Pended sales are the best indicator of the future numbers. Both the month over month and year to date pended sales are compelling.

d) Average Sales Price

 

Reaction: People are making money on their homes MoM and YoY. That is awesome.

E) Months Supply

Reaction: Supply is down. This bodes well for the future of home prices.

2. School Districts

Three top performers In Average Sales Price:

a) Allentown School District (+7.9%)
b) Southern Lehigh (+11.8%)
c) Northampton (+31.7%)

Some performance that needs some work.

a) Catty: -15.1 %
b) Wilson: -8
c) Northwestern Lehigh ( -7.7 %)

-Stephen

Market Update for May 2015

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 Find the whole report here:

1)

 

Reaction: The Lehigh Valley is sustaining its growth on a healthy path. A reduction in closed Sales and an increase in Median Sales price is precisely what one should want to see.  Lets delve deeper!

2) New Listings and Average Sales Price

Reaction: There was a pervasive thought that the market would suffer from a backlog of listings once the average price increased. Seeing a market that is up 6.5% in average sales price and only has a 1.1% increase the amount of listing is great, it seems to stymie this thought.

3) The Momentum continues.

Reaction: The Pended Sales being up 20.6% bodes well for the future. The percent change over the past 12 months has been up 10% per month. Impressive.


Zillow Report:

Zillow Report Link

From the peak of home values, we are now 19.3%. I like this report because it tells you how many foreclosures there are per 10,000 (4.4) and negative equity there is in the respective counties. Feel free to compare and contrast the results. Zillow is more bearish in the Lehigh Valley than the Realtor report.


I hope you enjoy the reports and numbers.

thanks!