Kentucky Housing Market Stabilizing
Buyers willing to wait as price growth expectations abate
Forty-five percent of Kentucky REALTORS® expect houses to stay on the market for longer over the next twelve months, according to the June 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Thirty-six percent of the 354 REALTORS® from across Kentucky, expect an increase in price reductions by sellers over the next twelve months.
Forty-eight percent of the REALTORS® said their buyers were waiting for a pickup in new construction. “As the economy opens up and consumers get increasingly more confident about their job prospects, potential homebuyers are less likely to feel pressured into buying whatever is available. All the more so when substantial mortgage rate increases are not imminent and housing construction bottlenecks are starting to ease,” explained Vidur Dhanda, author of the survey. In the latest issue of the Home Purchase Sentiment Index, Fannie Mae reported that 64 percent of the respondents said it’s a bad time to buy a home while 77 percent said it’s a good time to sell.
The headline HousingIQ/Kentucky REALTORS® Confidence Index dropped over seven points to 44.5. 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 over thirteen-point jump in the Buyer Power sub-index and over ten-point drop in the Price Expectation sub-index, point to a more balanced market with stable prices.
The Homeowner Stress sub-index continued to ease with seventy-seven percent of the respondents anticipating no surge in new listings as mortgage forbearance winds down. “This is the success of timely intervention by various agencies and strong projected economic growth,” said Dhanda.
Sixty-seven percent of the respondents said current market conditions are causing burnout among realtors. To help cope with the pandemic, Kentucky REALTORS® supported its members with different initiatives, including launching a healthcare marketplace. “Fifteen months ago we entered uncharted territory and Kentucky REALTORS® rose to the occasion,” said Kentucky REALTORS® CEO, Steve Stevens. “There is no doubt that continued low inventory, increased competition, and the resulting longer hours required have taken its toll. The health and well-being of our members is paramount and we will continue to support them.”
- 40% expect house prices to increase
- 36% expect increased price-cutting
- 47% expect an increase in sales volume
- 45% expect houses to stay on the market longer
- 48% said buyers were waiting for a pickup in new construction
- 44% expect fewer offers per house
“With competition starting to wane and price reductions on the horizon, a local REALTOR® is invaluable in setting the right listing price and facilitating a smooth transaction,” said Charles Hinckley, President of Kentucky REALTORS®.
The full report is available here.