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Allentown, PA: Real Estate Market & Trends 2016

Published on Friday - December 02, 2016

The Allentown real estate market remains rich with investment opportunities. Gains in the last three years have helped to pull the local market out of a period of post-recession price weakness, which bodes well for investment purposes. Another bright spot is home affordability. The Allentown housing market is among the most affordable markets in the country, helping the prospects of rental properties in coming years. Lastly, the local economy is is improving; both unemployment and job-growth saw better-than-expected results in the first-half. Together, the Allentown real estate market should see a better second-half.

Allentown, PA Real Estate Market Statistics:

Allentown housing market

During the first-half, the faintest of gains occurred in total equity. One-year appreciation rates for Allentown real estate fell to -1.7 percent in the second quarter, as three-year rates struggled to reach 1.9 percent. In comparison, the national average saw one-year and three-year appreciation rates of 4.9 percent and 17.8 percent respectively. Investors and homeowners have witnessed price trends in the last three years undercut the steady post-recession home equity growth, despite paying down principle. For those considering Allentown real estate investments, the following spotlights appreciation gains in previous years:

  • Homes purchased in the Allentown, PA housing market one year ago have appreciated, on average, by $86. The national average was $14,963 over the same period.
  • Homes purchased in the Allentown, PA housing market three years ago have appreciated, on average, by $13,085. The national average was $46,878 over the same period.
  • Homes purchased in the Allentown, PA housing market five years ago have appreciated, on average, by $9,097. The national average was $82,353 over the same period.
  • Homes purchased in the Allentown, PA housing market seven years ago have appreciated, on average, by $15,123. The national average was $77,054 over the same period.
  • Homes purchased in the Allentown, PA housing market nine years ago have appreciated, on average, by $50,864. The national average was $31,126 over the same period.

Despite homeowners paying down principle, the price trends in the last three years for Allentown real estate have undercut the steady post-recession home equity growth. Gains in total equity for the last nine years have all dropped below the national average, except one: Year nine, when homes appreciated, on average, by $50,864. Although the current landscape has struggled in recent years, it has also created an abundance of opportunities for Allentown real estate investing.

One such opportunity comes in the form of foreclosures. According to RealtyTrac, the Allentown real estate market had 490 properties in some stage of foreclosure during the month of October. Compared to other markets, the number of foreclosures in Allentown is low. However, foreclosures last month were 75 percent higher than the previous month and five percent lower than the same time last year. REO properties, otherwise known as bank-owned real estate, experienced an increase during the second quarter, rising to 37.5 percent from last month. In comparison to last year, however, REO properties fell to 15.4 percent. The number of foreclosures via auction skyrocketed during the month of October. Compared to the previous month, auction properties grew 114.8 percent, while the number of auctions in comparison to last year was only 11.5 percent.

Allentown, PA Real Estate Market Summary:

Allentown real estate

  • Current Median Home Price: $185,700
  • 1-Year Appreciation Rate: -1.7%
  • 3-Year Appreciation Rate: 1.9%
  • Unemployment Rate: 5.3%
  • 1-Year Job Growth Rate: 0.5%
  • Population: 118,577
  • Median Household Income: $37,356

Allentown, PA Real Estate Market (2016) — Q2 Updates:

Allentown real estate investing

The Allentown real estate market experienced a rocky second quarter, despite slight gains in other areas. The median home price for Allentown real estate was $185,700 during the second quarter, compared to the national average of $239,167. Appreciation rates fared worse, as one-year appreciation rates were -1.7. Total equity gains reflected those rates, as homeowners and investors earned minimal returns last year.

One positive aspect of the second quarter for Allentown real estate has been the local economy. Employment has held up and is on an upward trend, as job growth continues to make small improvements. The one-year job growth rate was 0.5 percent during the second quarter, compared to the national average of 1.9 percent. On the other hand, unemployment continues to lag in comparison to other markets. Unemployment rates for Allentown were 5.5 percent, whereas the national average saw rates of 4.9 percent. However, those rates are actually an improvement from the previous year of 5.5 percent.

Another beneficial component includes home affordability. The Allentown housing market remains one of the more affordable markets in the country, as homeowners paid 8.3 percent of their income to mortgage payments last quarter, while the national average paid 15.8 percent. That percentage is better than the market’s historical average of 13.6 percent, which reveals affordability is only getting better. On the other spectrum, the rate of construction for new housing remains flat. New housing construction during the second quarter was 66.8 percent below the long-term average, while single-family housing permits fell drastically, tumbling -48.1 percent, in comparison to the national average of 10.6 percent. Construction is down from last year and appears to have bottomed out.

Moving forward, the Allentown real estate market is forecasted to experience weaker price growth in the next 12 months. According to the National Association of Realtors (NAR), home prices for Allentown real estate are predicted to grow by 3.1 percent, compared to the national average of 3.6 percent. Although behind the rest of the country, the Allentown real estate market is poised to continue the trend of improvement in the second-half of 2016.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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