Lehigh Valley Real Estate Market Conditions

   Monday Market Update

Now that 2008 is over, it's time to take a look at the Lehigh Valley Home Prices over the past three years. Let's take a look at some specific real estate data for 2006 thru 2008. I selected Bethlehem Township (on the east side of the valley) and Macungie (on the west side of the valley) for this posting.

During the next few weeks, I'll be updating the data on www.lehighvalleyhomesonline.com for all of the municipalities in Lehigh Valley.

Bethlehem Township
	2 Bedroom	3 Bedroom	4 Bedroom	5 Bedroom	Minimum	Maximum	Average	Median
2008	$175,236	$223,784	$321,728	$511,938	$41,000	$1,000,000	$266,318	$248,000
2007	$199,679	$241,293	$348,418	$497,038	$49,000	$1,150,000	$284,078	$268,450
2006	$162,053	$242,358	$350,056	$477,740	$17,500	$1,250,000	$289,765	$270,000
Macungie (including Upper and Lower Macungie)
	2 Bedroom	3 Bedroom	4 Bedroom	5 Bedroom	Minimum	Maximum	Average	Median
2008	$174,951	$219,735	$344,791	$399,557	$8,000	$1,500,000	$278,098	$265,000
2007	$178,443	$230,520	$368,348	$415,807	$11,250	$1,075,400	$288,359	$276,950
2006	$173,965	$229,142	$360,937	$461,274	$10,000	$1,010,000	$284,779	$272,500

Information provided by Rappatoni MLS and deemed reliable but not guaranteed for the date range of 01/01/06 through 12/30/08.  It does not reflect future sales, or currently listed homes.

In Bethlehem Township, the data shows that from 2006 to 2007 the home prices stayed relatively flat (some ranges increased some decreased). From 2007 to 2008, we see that prices went down between 5% -10%.

In Macungie, a similar trend occured although Macungie wasn't affected as much in 2007. In 2008, the prices decreased between 5% - 10%.

During this time, interest rates also went from a high of around 7% to back down around the 5% level.

So, what does this all mean. If you purchased a house in 2006 for $200,000 with a 6.5% mortgage your monthly P&I (principle and interest) is $1220.00 (FHA 3.5% down).

If you get the house for $20,000 less but the interest rate is 5.0% your monthly P&I is $933.00 (FHA 3.5% down). Over a $300.00 difference per month from the 2006 prices/interest rates.

If the interest rate goes back up to 6% then the P&I is $1042.00. If the house prices decrease another $10,000 but the rates remain at 5% then the P&I is $881.00.

Confusing? Let's put it into a table for clarity

Purchase Price	Interest Rate	P&I
$180,000	5.0	$933.00
$180,000	6.0	$1042.00
$170,000	5.0	$881.00
$170,000	6.0	$984.00

What is clear in this table is that the interest rate on the mortgage is a definite factor on determining when to purchase a house. Purchasing that $180,000 house at a 5.0% interest rate is cheaper than purchasing a $170,000 house at a 6% interest rate. Your mortgage payment is over $50.00 more even though the house is $10,000 less.

Interest rates are dependent on credit scores and debt ratios. With banks tightening the guidelines is it in your best interest to wait on purchasing that home?