Prices Surge Above Economist Expectations
In little corners of the US, a there is a subtle realization that something is wrong. "The National Association of Realtors has predicted prices of existing homes in the United States will rise 5.6 percent this year."
"Average local home prices shot up 12 percent in the first three months of the year, proof that the predicted cooling of the real estate market hasn't arrived. That 12 percent uptick is ahead of the solid growth the region saw in the same period last year, when prices for existing homes rose 9 percent."
As in other areas, one bubble begets another. "Housing prices are rising faster than Lehigh Valley residents' wages, largely because of a steady influx of new homebuyers with higher incomes from costlier areas such as New York and New Jersey."
"'What we see is the local people not being able to make the move,' said Sam Ruta, of Coldwell Banker. Ruta said he held an open house last fall for a home that ultimately sold for $250,000. Nearly all the people who attended the open house hailed from New York and New Jersey. But one Lehigh Valley man came with his young son. 'He looked around and said 'I can't afford this house and I am from Palmer Township.'"