Kentucky REALTORS® Anticipate Hot Spring Market
Demand from investors to fuel bidding wars as supply remains at historic lows
Thirty-four percent of Kentucky REALTORS® say more houses will sell above the asking price, while thirty percent anticipate an increase in foot traffic, according to the February 2022 edition of the HousingIQ Survey of Kentucky REALTORS®.
“The low inventory and ongoing supply chain challenges to new construction is fueling competition amongst buyers as they rush to get in front of rate increases. 44% of the survey respondents reported that buyers were rushing to beat rate increases,” said Vidur Dhanda, survey author.
In the latest Home Purchase Sentiment Index issue, which tabulates national consumer sentiment, Fannie Mae reported a survey high of 67% of respondents expect mortgage rates to increase.
The Mortgage Bankers Association reported that the national weekly Purchase Index was 7 percent lower than a year ago.
Dhanda continued: “As the rental market heats up, demand from investors will further increase competition. 42% of the survey respondents said that investors had outbid their individual buyers.”
COMPARED TO A YEAR AGO »
- 51% expect house prices to increase—a 15-point drop
- 36% expect houses to stay on the market for longer—a 22-point increase
- 29% expect greater price-cutting by home sellers—a 12-point increase
- 30% anticipate an increase in foot traffic—a 26-point drop
Based on the monthly survey data, the HousingIQ/Kentucky REALTORS® Confidence Index provides a composite measure of expectations for the Kentucky housing market over the next year.
The HousingIQ/Kentucky REALTORS® Confidence Index increased two points from last month to close at 49. A value of 100 corresponds to all respondents agreeing that market conditions will improve. In contrast, 50 corresponds to respondents anticipating no change in market conditions. Compared to a year ago, the headline index is eight points lower.
The Buyer Power sub-index continued its six-month drop to close at 51. However, compared to a year ago, it is 17 points higher. The Price Expectation sub-index was mostly unchanged and is 12 points lower than a year ago. The Homeowner Stress sub-index was also mostly unchanged and is five points lower than a year ago.
The survey results are available here.