Just like the weather outside, the Lehigh Valley housing market is already heating up in the midst of winter.
By the summer, it ought to be scorching, especially when considering the figures recorded last month.
While January is typically a slow time in the housing market, tame winter weather and a lack of available properties pushed the median sales price last month to $188,900, up almost 12 percent from a year ago and the highest January figure recorded since 2008, according to data released Wednesday by the Greater Lehigh Valley Realtors group.
In addition, at January's sales pace, it would take 2.2 months to sell all the existing homes on the market in the Lehigh Valley. That's the lowest that figure — called the months' supply of inventory — has been since at least 2005.
"As long as I've been licensed, and it's going on 15 years, I've never seen a January like this," said Sean LaSalle, president of the Realtors group and an associate broker with Berkshire Hathaway HomeServices Fox & Roach Realtors.
Specifically, LaSalle said, he's never seen the months' supply figure so low.
"It's almost scary low," he said. "There's not even close to enough inventory for the amount of buyers out there. I just hope buyers don't give up."
Call it an intensification of what the Lehigh Valley has been seeing. With inventory dropping month after month, the large pool of buyers out there are in heated competition for a smaller pool of homes, pushing prices up. Even Carbon County is in a seller's market, where the median sales price jumped 76 percent in January to $137,500.
It's a story playing out across the country. In the fourth quarter of 2017, for example, a jump in existing home sales nationally pushed inventory down to an all-time low. Meanwhile, home prices hit an all-time high in the fourth quarter in about two-thirds of U.S. metro areas, the National Association of Realtors said Tuesday.
Interestingly, home prices have risen 48 percent since 2011, while incomes are up only 15 percent during that time, noted Lawrence Yun, the national group's chief economist.
While homebuilding is picking up, experts say it's nowhere near the level needed to alleviate the low supply and meet demand. In addition, with the government regulations on homebuilders, it's difficult for them to price a new home below $400,000, which shuts out most first-time homebuyers and leaves them dependent on move-up buyers.
But even the under-$400,000 market is active, just not as hot as the $150,000 to $250,000 segment, area real estate professionals said. The high-dollar market is much calmer. For example, in the $1 million-plus market in Lehigh and Northampton counties, the months' supply is 35, according to Brad Patt, senior vice president of Berkshire Hathaway HomeServices Fox & Roach Realtors.
Real estate professionals expect more inventory to come on the market this spring — but buyer traffic will increase, too. Patt and LaSalle encourage potential sellers to list their home now, rather than wait until the spring and summer when more supply — and thus competition — hits the market.
But to bolster the inventory shortage even further, they say, some potential sellers have stayed on the fence because they're concerned they won't be able to find a new home once they sell their existing one.
But if they do decide to list, buyers will be there, though a home that's overpriced and in need of major repairs can still sit for a long time in this market. By comparison, well-priced, well-staged homes that are move-in ready are off the market in days — sometimes hours, LaSalle noted.
He expects home prices to rise anywhere between 4 to 7 percent this year, meaning the $205,000 median sales price recorded in August could easily be met or exceeded during the summer months this year.
It isn't just the Realtors expecting a busy 2018 real estate market.
Omar John Nassar, assistant vice president and regional mortgage manager at Trident Mortgage Co. in South Whitehall Township, said mortgage preapprovals through the first half of February are 18 to 20 percent higher than the same period last year.
Nassar sees a couple reasons for the increase. For one, buyers are realizing they need to be preapproved to compete for a limited supply of homes that are moving off the market quickly. And secondly, he said, buyers are looking to get in before mortgage rates jump to 5 percent or beyond.
Last week, a 30-year fixed-rate mortgage averaged 4.32 percent, up from 4.22 percent a week earlier, according to Freddie Mac.
Nassar also is seeing a significant increase in the number of first-time homebuyers in his office, especially those ages 25 to 32, before they go out in the competitive Lehigh Valley housing market.
"They're all battling for the same houses," he said.
Get the inside scoop on the Lehigh Valley's business scene on The Business Cycle: themorningcall.com/business
Like on Facebook: facebook.com/LVBizCycle