Kentucky Housing Market Continues To Cool Down
Buyers willing to wait as sellers adjust pricing
Seventy percent of Kentucky REALTORS® said that their buyers were waiting for prices to stabilize, according to the August 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Fifty percent of the 309 REALTORS® from across Kentucky expect greater price-cutting by sellers over the next twelve months, while thirty-two percent expect more houses to sell below the asking price.
The headline HousingIQ/Kentucky REALTORS® Confidence Index continued its six-month slide to read 36.9. A value of 100 corresponds to all respondents agreeing that market conditions will improve, while 50 corresponds to respondents anticipating no change in market conditions. The Price Expectation sub-index dropped an additional 2.5 points. In contrast, the Buyer Power sub-index continued to edge up to read 68.5. Homeowner Stress was mostly unchanged.
“Homebuyers simply cannot afford to push up prices anymore,” explained Vidur Dhanda, author of the survey. “As price growth slows, potential sellers will want to cash in, which will supply much-needed inventory and further moderate prices. We are starting to see balance return to the market.” Only thirty-three percent of the survey respondents expect prices to increase over the next twelve months.
In the latest issue of the Home Purchase Sentiment Index, which reflects national consumer sentiment, Fannie Mae reported an increase in the number of respondents who said it’s a good time to buy a home to 32%. The number of respondents who expect home prices to go up declined to 40%.
Fifty-two percent of the respondents reported that mom-and-pop landlords were choosing to sell their properties. This is a fifteen-point jump from the January survey results.
“Kentucky REALTORS® has been tracking the impact of the eviction moratorium on landlords. We continue to advocate on their behalf while educating all stakeholders about available relief programs,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Twenty-two percent of the respondents said that corporate buyers had outbid their individual buyers.
“As inventory inches up and prices stabilize, Kentuckians will have greater opportunity for buying a home. REALTORS®, with their local relationships and knowledge, can guide buyers and make winning bids,” said Kentucky REALTORS® CEO, Steve Stevens.
- 33% expect house prices to increase
- 50% expect greater price-cutting
- 32% expect more houses to sell below the asking price
- 65% expect houses to stay on the market longer
- 43% anticipate an increase in the pace of new construction
- 47% anticipate an increase in the pace of new listings
The rapid spread of COVID-19 since mid-July is starting to have a more significant impact. The number of respondents reporting that their clients were holding back because of fears about the Delta variant increased nine points to twenty percent.
“Amidst the uncertainty caused by the Delta variant, struggling homeowners who are also exiting mortgage forbearance should consult with their local market experts. Last year’s price gains have likely created an equity cushion. A REALTOR® can educate them about their options,” said Charles Hinckley, President of Kentucky REALTORS®.
The full report is available here.