Cost of buying, renting in Lackawanna County surging
Homes throughout Lackawanna County have been selling quickly and at higher prices in the past year.
BY JON O'CONNEL STAFF WRI T ER / PUBL I SHED: MARCH 2 9 , 2 0 2 0 Scranton Times Tribune
In almost every pocket of Lackawanna County, the same story persists. Homes sell faster and command higher prices than they did only a year ago. In some cases, the difference is striking.
A few examples, according to Multiple Listing Service data:
■The median sale price for a Dunmore home jumped 13% this past February, compared to 2019, while the average time on the market dropped by more than half.
■The same trend appears in Old Forge, where the median sales price jumped a whopping 22% over the year and average time on market fell by 10 days to just about three months.
■Even in Scranton, a city plagued by notoriously high taxes, infamous for public corruption and home to aging housing stock, strong homebuyer demand persists in its neighborhoods, with median sales prices in February jumping 41% to $90,000 over the year. Average time on market dropped by about 50 days.
“Anytime you get into the valley — by the valley I mean the Tri-Borough or Mid Valley, Valley View or Lakeland school districts — never a problem selling,” said Bob Vanston, owner and broker at Berkshire Hathaway Home Services Preferred Properties. Homes are priced right and are fairly to very-well maintained, he said. He usually sees multiple oers on a single listing.
But what about the booming downtown rental market? Weren’t millennials shunning cars and mortgages for hip apartments in walkable neighborhoods? Turns out they’re not mutually exclusive.
Both the rental and owner-occupied markets seem to be rising together. With hundreds of new apartment units set to flood the market in the coming months and years in Scranton alone, developers say the current inventory hasn’t peaked yet — though it probably has to soon. “I don’t know what’s going to happen in the future,” said Steven Farrell, owner and broker of Classic Properties. “But I think it’s got to be approaching a saturation point. It has to be, because we’re not having an influx of people moving into the area.”
It’s unclear just how the current global crisis — the COVID-19 pandemic now roiling nancial markets and sending everyone into their homes to self-isolate — will shake out. Maybe a remote cabin on a couple of acres in Jeerson Twp., far from other people, sounds pretty good right now, especially to someone who just leased a trendy downtown loft last summer and worries about catching the virus.
‘It’s going to come back’
One third-generation developer who’s spent decades designing and building high-end neighborhoods believes he can still sell in spite of the pandemic, and that buyers will be even more eager when it’s over. “I think it’s going to come back, and it’s going to come back stronger than ever,” said Michael Noto, president of Abington Development Group. His company has built hundreds of townhomes and is currently working on its third and final phase of Abington Woods South, o Country Club Road in South Abington Twp. “People can still have homeownership,” he said, launching into a quick elevator pitch for his neighborhoods where the homeowners association takes care of the yardwork.
“It’s a lot less home maintenance,” he said, “The weekend comes, you can go out and play golf. You’re not tied down putting down mulch or things like that.” His buyers are pretty evenly divided, he said. A third of them, who pay upward of $350,000 for about 2,200 feet of townhouse, already have Abingtons roots. One-third move from the valley and another third are out-of-towners who move here for work or family and like the quiet neighborhood, low taxes, and amenities.
Home prices in Northeast Pennsylvania never quite fully rebounded from their pre-Great Recession levels, but they were getting there, and some pockets were doing especially well. Uncertainty fueled by the new coronavirus might pass, but it also could pump the brakes on that growth.
“I think now before this whole thing happened, prices were getting up there,” Farrell said. “We saw multiple offers for homes. We had a very low supply, especially at certain price points.” That’s part of the reason Scranton’s housing market, in spite of the high taxes, was making a rebound. “People thought it was a better buying option because they were getting considerably more house than in other areas,” he said.
While Farrell said the downtown apartment market might max out soon, he doesn’t believe the trend toward walkable living spaces will fade. What Noto and downtown developers, who are retrofitting old office buildings at a gregarious pace, both reveal is the resilient trend toward smaller, more manageable living spaces. They appeal to retirees and empty-nesters looking to downsize, as well as millennials who aren’t starting families as fast or growing them as big as the ones they came up in. Boomers downtown
Only more recently, Farrell has noticed baby boomers want the high-end, downtown apartment like the young professionals do, but for different reasons. If a retiree, with kids grown and moved out, nets $300,000 for unloading the family home, a monthly rent payment for a low-maintenance living space sounds a lot better than dumping all that money back into a smaller home, farther away from convenience, but still saddled with all the duties of owning property. “They want to be able to walk to the restaurants and bars, and they don’t want to be tied down to another mortgage,” Farrell said.
Before COVID-19, mortgage rates were already pretty low, making it easy for many people to entertain homeownership. Now, as the Federal Reserve pumps analgesics into a thrashing economy, they’re even lower. The average interest rate for a 30-year fixed mortgage was below 3.5% last week. “We’re looking at excellent interest rates,” Vanston said. “Who can’t afford a house now?”
And there’s another key indicator telling him the local housing market has some more growing to do. He’s not just watching homes sell faster, more buyers are scooping up vacant land. “Now we’re seeing people looking to build,” he said.
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