Last week the Morning Call published a front page story on the national and Lehigh Valley housing markets. This weekend,the team got together to draft a letter to the Editor. Even if it is not published, we wanted to share our views with our friends and clients:
Contrary to the opinions expressed in the January 16th front page story of the Morning Call, we believe it can be a good time for some sellers to sell their homes. The key: Don't focus on what the press is writing and saying about the national and regional markets. Real Estate is a local matter and analysis of home sales by neighborhood or school district shows that there are indeed homes in "local markets" that are holding their value and selling. Defining the market doesn't matter - it is the only market you have. Buyers are still buying; with interest rates at the lowest they have been in a couple of years: 5.75% for a 30 year fixed or 5.25% for a 15 year fixed, buyers who have confidence in their own personal financial situation will take advantage of these rates!
The Lehigh Valley enjoyed a wonderful 3-4 year ride when homes were realizing double digit appreciation every year. Although that seemed great to people at the time, that type of appreciation is not sustainable, nor is it good for the Lehigh Valley economy. As prices kept rising, many local buyers could not afford to buy their first home. Some investors were buying and selling homes as if they were stocks and bonds!
Traditionally the Lehigh Valley has enjoyed a 5-6% annual appreciation rate.
According to the National Association of Realtors statistics, if you live in your home for 10 years it should double in value. We were seeing that happen in 2-4 years. Once the market has completed its correction, we will do well to return to a 6% appreciation rate.
The facts are that buyers are buying and will continue to buy; some sellers need to sell and will put their homes up for sale; and people always need a place to call home.
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