Kentucky Housing Market Roars Into Spring
Hot seller’s market to worsen buyer affordability challenges
Fifty-two percent of Kentucky REALTORS®anticipate more houses to sell above the asking price over the next twelve months, according to the February 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Forty-five percent of the 231 REALTORS® from across Kentucky, said buyers were dropping out because of high prices.
“It’s a seller’s market. Those who can afford it are rushing to beat possible interest rate increases, and many buyers have just been priced out of the market”, explained Vidur Dhanda, author of the survey. “The good news is that survey respondents do not foresee a wave of foreclosures with the end of mortgage forbearance.”
The headline HousingIQ/Kentucky REALTORS® Confidence Index surged nearly six points to 57.0. 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 six-point increase in the Price Expectation sub-index and nearly seven-point drop in the Buyer Power sub-index point to a hot seller’s market.
With fifty-six percent of respondents anticipating greater foot traffic, two out of five expecting houses to sell faster, and over one-half expecting more houses to sell above the asking price in the next twelve months, Kentucky REALTORS® confidence has now recovered to the level before the start of the pandemic.
“2021 began with record low inventory levels which will impact sales volume. The market is showing signs of slowing down as pending sales in January were down for the first time since April 2020,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Eighty-five percent of the respondents said homeowners are not listing properties in anticipation of the end of mortgage forbearance. “The forbearance options available to homeowners have allowed more property owners to stay in their homes. It’s encouraging that those wishing to sell can do so on their own terms,” said Kentucky REALTORS® CEO, Steve Stevens.
- 56% of respondents expect an increase in sales volume
- 52% expect increased sales to first-time buyers
- 52% expect increased sales to investors
- 56% anticipate increased interest from out-of-state buyers
- 52% of respondents expect more houses to sell above the asking price
- 56% anticipate greater foot traffic
- 41% expect houses to sell faster
“With low inventory and the speed with which homes are being sold, it is more important than ever to partner with your local REALTOR®,” said Charles Hinckley, President of Kentucky REALTORS®. “They possess local market knowledge and can help Kentuckians achieve their real estate goals.”
The full report is available here.