Below I will go over five charts that I feel are relevant to the Lehigh Valley Housing market. Also, there is a video that goes over the highlights right beneath this short intro!
http://www.youtube.com/watch?v=oRbJLatGSN0
Supply and Demand chart Yearly period:
For Sale homes: (+)4.1% (4495)
Under Contract homes: (+) 1.6% (545)
Sold homes: (-) 7.1% (282)
Supply and Demand Yearly Chart
Reaction: The major recent theme for the Lehigh Valley housing market is that supply (For Sale homes) keeps increasing as the amount of Under Contract homes increases. For prices to increase, the number of For Sale homes needs to decrease, remain neutral, or increase marginally. Also, prices could increase if homes go Under Contract with further escalation of pace. It is excellent that the amount of homes going Under Contract continually increases. The increase signifies that demand is picking up in the market, yet, even though there are more homes going Under Contract, the amount of homes making it through settlement has decreased, which in turn decreases the overall amount of homes Sold. In the future I will have some blog posts going into more specifics about why homes are not selling. Much of it has to do with financing; it is more difficult to deal with financing today than it was 5 years ago.
Supply and Demand Chart February 2011 compared to February 2012:
For Sale homes: (+) 19.2%
Under Contract homes: (+)58.0%
Sold homes: (+)1.8%
Month to Month Supply and Demand Chart
Reaction: Just by looking at the Under Contract metric of the Month to Month chart, an increase of 58%, it seems that people are more excited about the Spring Market this year than last. Not only are more people attempting to take advantage of the larger pool of buyers that the spring market brings, but those buyers are doing more than looking around. As a result, the Lehigh Valley market should see an encouraging homes sold metric for the next few months. February is a traditionally slower month for the housing market but buyers are incredibly out and going Under Contract on homes at a 58% increase year over year. The Sold number also increased marginally, which means December 2011 and January 2012 were productive months for the housing market. I am curious to know if the warmer winter has started the Spring Season earlier than in year’s past. If the Spring Season started earlier, we should witness a slower March 2012 and April 2012 pertaining to the Under Contract numbers in the month to month comparisons.
Full year Median Price in the Lehigh Valley: (-)3.5% @ $150,000 (282 home sold)
Median Price Yearly period
Reaction: We are all waiting for prices to start to increase. Homes are continuing to Sell and supply continues to decrease. As supply decrease we will see an increase in prices. The problem with the Lehigh Valley housing market right now is how slow the housing environment is changing toward positive price increases.
Month Supply of Inventory over the year:
The Year Period for Month's Supply of Inventory
Reaction: Over the course of the year, supply increased by 1.6%. That is not an impactful change in the supply, it shows that the housing market has been in stasis as far as supply and demand is concerned. If one looks at the MSI chart from February 2010 to February 2012, one will see a decrease of (-)15.5%.
Month’s Supply of Inventory comparing month over month:
February 2010: MSI of 10
February 2011: MSI of 9
February 2012: MSI of 6.6
February 2012 compared to February2011
Reaction: The Lehigh Valley had a great month in terms of decreasing supply. A normal housing market has about 4-6 months of supply. If February is an indicator of what is to come for 2012, then the market looks like it will turn. I am cautiously optimistic about the market as it was a warmer in February than the past two years. Weather considered, February 2012 saw a decrease in MSI of (-) 26.1% which is compelling.
by Stephen Weinstein PA License # RS316695
