Lehigh Valley Market

From the Allentown Morning Call:

Sellers vexed as homes linger

A year ago when Betty and Lee Castle placed a deposit on a retirement community property, they began to think how much they would ask for the Allentown house they had lived in for 30 years.

They'd read about the frenzy in the real estate market, and figured it would hold.

Fast forward to now: Their 1800s stone farmhouse on the border of Allentown and South Whitehall Township has been on the market for four months, and two price reductions haven't made a difference.

''We should have sold a year ago,'' said Betty Castle, 57, as she sat in the living room that has wide-plank hardwood floors.
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But the red-hot market that marked the summer of 2005 — when bidding wars were not uncommon, when most homes sold for at least the asking price, when many houses were on the market for less than a month — is now a thing of the past.

The shift in the market is catching some homeowners by surprise.
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''Everyone has seen the crazy ones sell on their block for an outrageous price. It is a little bit hard to be realistic,'' said Angela Brown, owner of Real Estate Professionals of Hellertown. ''We don't have a plummeted market or a bad market. We have a normal market.''
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Many real estate agents say they have been counseling sellers to lower their expectations. Often it is a hard message for owners to hear.

''I tell them they need to reduce the price, but they don't want to listen to me,'' said Pete Ramos, president of the Lehigh Valley Association of Realtors, and owner of Ramos Realty in Bethlehem.
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The local increases in home prices are still handily outpacing the national rate. Economists say there is no danger the Lehigh Valley housing market will crash. Even if home appreciation continues to slow this year, the gains of the last few years won't be rolled back. Economists say the recent correction in the market is healthy.

But try telling that to the Castles, who are 10 weeks from closing on their new retirement home in Northampton.

They don't have a whole lot of room to negotiate on the $339,900 asking price of their farmhouse because they need the money for their retirement home.

Lee Castle, 58, has begun to gather information on bridge loans, in case the house does not sell before the closing of their new home.