The year 2023 looks much like the year 2022 in the Lehigh Valley housing market: higher prices, increased mortgage rates and lower sales.

The Greater Lehigh Valley Realtors (GLVR) reported that January data indicates the start of 2023 is “in a state of rebalance,” with “many buyers and sellers remaining cautious while they wait to see where the real estate market is headed.”

According to statistics for January in the report released Feb. 14:

* Closed sales decreased 38.1 percent to 349 listings.

* Pending Sales decreased 4.2 percent to 453.

* New Listings decreased 9.2 percent to 492.

* Inventory increased 12.8 percent to 571 units for Lehigh and Northampton counties.

* The Median Sales Price increased 10.9 percent to $300,000.

* Percentage of List Price Received decreased 2.7 percent to 99.0 percent.

* Homes sold, on average, in 27 days, an increase of 22.7 percent, or five days, compared to January 2022.

January statistics

• Average sales price increased 8.4 percent in January to $340,054, up from $313,567 in January 2022. The average year-to-date sales price increased 8.4 percent to $340,054, up from $313,567.

• Median sales price increased 10.9 percent in January to $300,000, up from $270,500 in January 2022. The year-to-date median sales price increased 10.9 percent to $300,000, up from $270,000.

• Percentage of list price received decreased 2.7 percent to 98.0 percent in January, down from 101.7 percent in January 2022. The year-to-date percentage of list price received decreased 2.7 percent to 98.0 percent, down from 101.7 percent.

• Closed sales decreased 38.1 percent to 349 units in January, down from 564 units in January 2022. The year-to-date closed sales decreased 38.1 percent to 349 units, down from 564 units.

• Pending sales decreased 4.2 percent to 453 units in January, down from 473 units in January 2022. The year-to-date pending sales decreased 4.2 percent, to 453, down from 473.

• New listings decreased 9.2 percent to 492 units in January, down from 542 units in January 2022. The year-to-date new listings decreased 9.2 percent, to 492 units, down from 542 units.

• Days on market increased 22.7 percent to 27 days in January, up from 22 days in January 2022. The year-to-date days on market increased 22.7 percent, to 27 days, up from 22 days.

• Months supply of inventory increased 28.6 percent to 0.9 months in January, up from 0.7 months in January 2022.

• Inventory increased 12.8 percent to 571 in January, up from 506 in January 2022.

• Housing affordability index decreased 29.8 percent to 118 in January, down from 168 in January 2022. The year-to-date housing affordability index decreased 29.8 percent to 118, down from 168.

Carbon County

In Carbon County, in January, the Median Sales Price increased to $231,900.

Closed Sales decreased to 37.

Pending Sales decreased to 42.

New Listings decreased to 58.

Inventory increased to 101 units.

Months Supply of Inventory increased to 1.6 months.

Days on Market increased to 46 days.

LV analysis

“Although home prices remain high, mortgage rates declined steadily throughout January, falling to their lowest level since September, sparking a recent surge in mortgage demand,” said GLVR CEO Justin Porembo.

“Lower rates should aid in affordability and may soon lead to an uptick in market activity ahead of the spring selling season,” Porembo said.

“Demand for housing persists, and many would say higher mortgage interest rates have cut into housing affordability,” said GLVR President Howard Schaeffer.

“But with homes spending a little longer on the market, buyers have more time and negotiating power when shopping for a home. Seller concessions are making a comeback, too,” Schaeffer said.

“At the end of a deal, it all balances out, and my clients are notably seeing in real-time the affordability story isn’t quite as alarming as it seems on the surface,” said Schaeffer.

National indicators

In the United States, pending sales rose 2.5 percent month-to-month, marking the first increase since May, while sales of existing homes fell 1.5 percent as of last measure, according to the National Association of Realtors (NAR).

Higher mortgage interest rates have cut into housing affordability, with home sales down 17.8 percent in 2022, compared to 2021.

As sales slow, time on market is increasing, with the average home spending 26 days on market as of last measure, according to NAR.

2022 overview

The GLVR compiled an in-depth report on the 2022 local housing market.

Highlights of the report, applicable to the Lehigh and Northampton counties, include:

Sales:

Pending sales decreased 14.1 percent, finishing 2022 at 7,515. Closed sales were down 12.1 percent to end the year at 7,675.

Listings:

Comparing 2022 to 2021, the number of homes available for sale was up 6.4 percent. There were 602 active listings at the end of 2022. New listings decreased by 10.5 percent to finish the year at 8,942.

List Price Received:

Sellers received, on average, 102.0 percent of their original list price at sale. Year-over-year original list price increased 0.4 percent.

Distressed Homes:

Previous forbearance efforts by the government and lenders limited distressed sales activity once again.

In 2022, the percentage of closed sales that were either foreclosure or short sale finished the year at 0.4 percent of the market, or 31 properties out of the 7,675 closed for the year.

Foreclosure and short sale activity may increase in 2023, though the strong gains in equity seen by most homeowners in the last few years will help to limit the number of distressed sales.

Prices:

Home prices were up in 2022, compared to 2021. The overall median sales price increased 12.9 percent to $293,000 for 2022. Single Family home prices were up 11.5 percent compared to 2021, and Townhouse-Condo home prices were up 15.0 percent.

Carbon County:

Closed sales were down 5.2 percent to 799.

There were 951 new listings, and 2022 closed with 91 active listings.

Percent of list price received at sale for 2022 was, on average, 96.7 percent.

The overall median sales price increased 7.7 percent to $210,000.

2023 outlook:

For 2023, much depends on inflation, mortgage interest rates and the broader state of the economy.

Economists predict many of 2022’s housing trends will continue into 2023: home sales will soften, price growth will moderate, inventory will remain tight and there will be greater variability between markets nationally, with some regions possibly seeing price declines while other, more affordable areas of the United States, such as the Lehigh Valley, remain in high demand and experience price growth.

GLVR Information

The Greater Lehigh Valley Realtors is a not-for-profit trade association representing more than 3,000 Realtors in Carbon, Lehigh and Northampton counties.

The association provides professional development and training resources, competitive market information, legislative advocacy, peer review and mediation processes for members, and a dispute resolution service for consumers.

The association owns and operates the Greater Lehigh Valley Multiple Listing Service (MLS) and the Greater Lehigh Valley Real Estate Academy.

Realtors are distinguished from real estate licensees by subscribing to a strict code of ethics and standards of practice as defined by the National Association of Realtors.

Information: www.GreaterLehighValleyRealtors.com