HousingIQ Survey of Kentucky REALTORS® – March 2021
Kentucky Home Price Growth To Moderate On Low Inventory
Opportunity for single-family rental investors as first-time buyers get priced out
Fewer than two in five Kentucky REALTORS® expect house price appreciation to exceed that of the last twelve months, according to the March 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Less than one-half of the 337 REALTORS® from across Kentucky, expect their sales volume to increase over the next twelve months.
“The low inventory, low mortgage rate-fueled price growth is running into an affordability wall”, explained Vidur Dhanda, author of the survey. “First-time buyers are getting priced out as their income growth cannot keep up with double-digit home price increases, even with the benefit of historically low mortgage rates.”
The headline HousingIQ/Kentucky REALTORS® Confidence Index dipped to 56.0. 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 over six-point drop in the Price Expectation sub-index and continued slide in the Buyer Power sub-index, point to a strong market with moderate price growth.
With fifty-eight percent of the respondents anticipating more houses to sell above the asking price, forty-five percent expecting lesser price-cutting, and forty-two percent expecting houses to sell faster in the next twelve months, Kentucky REALTORS® foresee a strong seller’s market constrained by affordability issues.
“The low inventory in Kentucky’s housing market, along with slowly rising mortgage interest rates, is finally influencing the sales boom we have experienced since May of 2020,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Thirty-five percent of the respondents said mom-and-pop landlord confidence in the rental market has decreased. “Mom-and-pop landlords are vital to the market. They are oftentimes a part of the local community and an important source of affordable housing. The recently enacted renter relief is an important step in helping them and we continue to champion their cause,” said Kentucky REALTORS® CEO, Steve Stevens.
- 47% of respondents expect an increase in sales volume
- 37% expect increased sales to first-time buyers
- 45% expect increased sales to investors
- 48% anticipate increased interest from single-family rental investors
- 58% of respondents expect more houses to sell above the asking price
- 44% anticipate greater foot traffic
- 42% expect houses to sell faster
“It’s a challenging market for buyers. A local REALTOR® is invaluable in putting together a winning offer,” said Charles Hinckley, President of Kentucky REALTORS®. “For SFR investors, a local REALTOR®offers the ears-to-the-ground insights that are essential for sound investment decisions.”
The full report is available here.
Contact us to learn how we can help you tap into the collective wisdom of local market experts.