Kentucky Housing Market To Slow Down
Houses to stay on market for longer as buyers adjust to the post-pandemic world and reluctant sellers return to the market
Two out of five Kentucky REALTORS® anticipate an increase in inventory in the next twelve months, according to the April 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Over one in four of the 318 REALTORS® from across Kentucky, expect houses to stay on market for longer over the next twelve months.
“With the success of the COVID-19 vaccine rollout and optimism about the recovery, previously reluctant sellers are returning”, explained Vidur Dhanda, author of the survey. “As buyers become more certain about their financial situation, demand will continue to stay strong, although, higher interest rates and overall affordability issues will moderate price growth.”
The headline HousingIQ/Kentucky REALTORS® Confidence Index dropped nearly four points to 52.2. A value of 100 corresponds to all respondents agreeing that market conditions will improve, while a value of 50 corresponds to respondents anticipating no change in market conditions. The nearly five-point jump in the Buyer Power sub-index and less than one-point drop in the Price Expectation sub-index, point to a seller’s market turning buyer friendly.
The Homeowner Stress sub-index jumped nearly six points with sixty-five percent of the respondents anticipating an increase in delinquencies. In a recent report by Attom Data, April 2021 foreclosure starts jumped 47% in Kentucky compared to the 1% drop nationally. “The recent increases in home values have contributed to homeowners’ equity cushion which offers them many options and will likely prevent a crisis as mortgage forbearance comes to an end,” said Dhanda.
“Home sales numbers continue to be up year-over-year, but the meteoric rise in volume is largely due to the higher prices that the current housing market is commanding,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Thirty-eight percent of the respondents said iBuyer transactions will increase. “With their reliance on automation, iBuyers offer convenience that comes at the cost of lower price for sellers. Potential sellers should consult with their REALTOR® for a more comprehensive evaluation of their property and best sales strategy,” said Kentucky REALTORS® CEO, Steve Stevens.
- 48% of respondents expect an increase in sales volume
- 40% expect increased sales to first-time buyers
- 50% expect increased sales to investors
- 54% anticipate increased interest from single-family rental investors
- 56% of respondents expect more houses to sell above the asking price
- 43% anticipate greater foot traffic
- 32% expect houses to sell faster
“As sellers return to the market, it is important for them to avoid mispricing their property,” said Charles Hinckley, President of Kentucky REALTORS®. “A local REALTOR® has the market insight to strike a balance; achieving both a competitive price and a smooth transaction.”
The full report is available here.