Kentucky Housing Market Starts Year On Strong Note
Buyers grapple with affordability as homeowners confront financial uncertainty
Fifty-three percent of Kentucky REALTORS® anticipate higher sales volume over the next twelve months, according to the December 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. Sixty percent of the 242 REALTORS® from across Kentucky, anticipate an increase in short sales over the next twelve months.
“This is a market that is being buoyed by low interest rates and sustained by lack of inventory,” explained Vidur Dhanda, author of the survey. “The elephant in the room is the end of mortgage forbearance. The recent increase in housing wealth does provide a cushion, but the impact of the uneven recovery and potentially permanent changes to the economy should temper our expectations.”
The headline HousingIQ/Kentucky REALTORS® Confidence Index was nearly flat at 46.3. 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 three-point increase in the Price Expectation sub-index and nearly five-point increase in the Homeowner Stress sub-index reflects the current state of the market – a fundamentally strong market that will likely absorb any financial fallout.
With slightly over half the respondents expecting higher prices, nearly one-third anticipating fewer price reductions, over a quarter expecting houses to stay on market for longer, and two out of five respondents expecting greater foot traffic in the next twelve months, Kentucky REALTORS®collectively anticipate a strong market albeit with subdued price gains.
Sixty-two percent of the respondents expect increased sales to distressed property investors. “As consumers come to terms with the economic impact of the pandemic, distressed sellers should reach out to their local REALTORS®. They are a part of the local community, vested in local success, and have access to resources that the typical consumer lacks,” said KYR Communications Director, Paul Del Rio.
Sixty-eight percent of the respondents expect increased interest from out-of-state buyers. “As Kentucky continues to attract buyers from other parts of the U.S., REALTORS®, equipped with their local knowledge and network of service providers, are an invaluable resource for distant buyers,” said KYR CEO, Steve Stevens.
- 53% of respondents expect an increase in sales volume
- 46% expect increased sales to first-time buyers
- 41% anticipate increased foot traffic
- 27% anticipate houses to stay on the market for more days
- 55% of respondents expect an increase in listings with the end of mortgage forbearance
- 39% foresee increase in number of potential homebuyers preferring to rent
- 62% expect increased sales to distressed property investors
Thirty-nine percent of the respondents foresee an increase in the number of homebuyers opting to rent. “Affordability continues to be a concern. However, it is disheartening to see so many give up on the wealth-creation benefits and joys of homeownership. I would urge everyone to consult with a local market expert.” added KYR President, Charles Hinckley. “REALTORS® have experience with various ways to help buyers qualify and secure the qualifications needed to purchase a home.”
The full report is available here.