The residential real estate market marked a turning point in 2012 as many industry experts agree stability is returning to the market. What does that mean for 2013? At present, real estate agents in and around the Lehigh Valley admit to an optimistic outlook for the New Year. Monna Lou Henninger, a real estate agent with Coldwell Banker Heritage Real Estate in Bethlehem Township, is optimistic because inventory continues to get absorbed. “I feel the New Year is going to be a decent year because I believe there is pent-up demand,” she said. “If we have more people looking to buy homes and less homes coming on the market, then the market will change. “It will then become a seller’s market as opposed to a buyer’s market.”
Henninger believes reduced inventory, a high affordability index and a lack of new construction bode well for the resale market in the Lehigh Valley. Another real estate agent sees similar potential in the Poconos – once buyers there reduce the glut of current inventory.
“I see an upcoming an increase in sales, not in price,” said Eileen Chaladoff, president of the Pocono Mountains Association of REALTORS and real estate agent with Prudential Associates Real Estate in East Stroudsburg, Monroe County. “Right now we are still trying to get through the distressed properties. Once we get through that, the market should really take off.”
Chaladoff sees steady improvement in sales, but expects the market to take another year or two to clear distressed properties out of the area’s housing stock. That’s a factor that will prevent any appreciation in home sale prices for 2013. The housing stock in New Jersey’s Warren County continues to see brisk activity; a trend one professional hopes will carry over into 2013. “All indications are that the market will be increasing due to the election behind us and people being overwhelmed… (and) the interest rates still being at an all-time low,” said Shelley Mondzak, broker/owner of Re/MAX Supreme in Philipsburg. “We are seeing activity in December, with many multiple offer situations. Many homes, especially things that are going on the market now, are going under contract very quickly. “All indicators are that the first quarter of 2013 will be an increase and, fingers crossed, that does happen.”
Other industry professionals also await decisions from Washington on whether proposed tax increases on Jan. 1 and year-end expiration of tax credits (including the mortgage interest deduction) will occur. “The housing market in 2013 will probably look a lot like this year’s in Schuylkill County,” said Kent Hatter, a broker with RE/MAX Five Star Realty of Orwigsburg.
“I think next year is a holding pattern. If people have confidence in their jobs and money in their pockets, the economy will do just fine. But really the uncertainty is what’s hanging over everybody.” Washington’s procrastination in dealing with its fiscal responsibilities fuels that uncertainty for prospective homebuyers and businesses.
“The people I talk to are all looking at this ‘fiscal cliff’ and tax uncertainty not knowing which way to go, so they are not looking to do any moves in their business or speculation,” said Hatter. “It seems we are in this huge pattern of uncertainty. Nobody knows what the tax rates are going to be (or) the health care law, how much money that could take out of people’s disposable incomes.” While Hatter believes buyers remain concerned about the economy, he sees a silver lining. “The good news is, from every sign, interest rates are going to remain low,” he said. “A lot of foreclosures nationwide have gone through the process, so I hear from people that in certain price ranges there’s a shortage of homes for sale. So maybe we have seen the housing prices stabilize and that will be good for 2013.” Price stability and reduced inventory just might create the foundation for a solid turn-around in the industry in 2013. “I expect that we are going to see continued growth in sales which means that more of the inventory is going to be absorbed,” said Bill Sands, broker, owner and president of Sands & Co. of Wyomissing, Berks County. “As that becomes absorbed, we’re heading in a slow, moderate procession towards the market changing from a buyer’s market into a seller’s market again because less inventory means more demand.” Sands said certain segments of the Berks’ market see both increasing sales and property values. “We might see some growth as far as the baseline of where our real estate values are and where they will be going,” he says. “In the last quarter of the year, we have seen definite increases and upticks in some of the markets. They are modest but it’s still a good sign. We are very pleased this past year with it being busy and buyers acquiring properties and I have no reason to believe that that’s going to stop.” Activity and optimism also have increased in Carbon County. “We are very optimistic in Carbon County,” said James Zurn, president of the Carbon County Board of REALTORS and agent with Cedar Creek Real Estate in Jim Thorpe. “Our inventory of homes is decreasing, so people are buying homes. The programs that are out there are very, very good. You just need to be able to qualify. With FHA and USDA, people are able to buy homes with little to no money out of pocket.” Zurn does fear continued difficulty with tight lending criteria as well as lingering buyer concerns about job stability. “Homes are at an all-time low; interest rates are at an all-time low,” he said. “That’s good news for the buyers. Those are all good indicators but again no one is going to buy anything if their job is uncertain.” Yet Zurn and other agents remain optimistic about growing activity during the coming year. “We are very optimistic and rightfully so,” he said. “Things are picking up. I think the bottom has been reached and we are going to see it improve. We have a bright future.”