Kentucky Housing Market Steadies
Investor demand to keep housing market strong as price growth slows
Sixty-seven percent of Kentucky REALTORS® anticipate an increase in home purchases by investors, according to the September 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Forty-four percent of the 243 REALTORS® from across Kentucky expect house prices to increase over the next twelve months, while forty-nine percent expect greater price cutting.
The headline HousingIQ/Kentucky REALTORS® Confidence Index ended its six-month slide by inching up three points to read 39.6. A value of 100 corresponds to all respondents agreeing that market conditions will improve, while 50 corresponds to respondents anticipating no change in market conditions. The Price Expectation sub-index gained five points while the Buyer Power sub-index remained mostly unchanged at 68.3. Homeowner Stress dropped three points to read 73.5.
“The run-up in rent prices continues to make the rental market attractive to corporate investors. As individual homebuyers grapple with affordability challenges and inventory shortages persist, investors will continue to snap up properties,” said Vidur Dhanda, author of the survey. “Corporate investors, although deep-pocketed and able to act fast, are disciplined and patient. They are unlikely to fuel bidding wars.”
In the latest issue of the Home Purchase Sentiment Index, which reflects national consumer sentiment, Fannie Mae reported a seven-point drop in the number of respondents who said it’s a good time to buy a home to 28%. The number of respondents who expect home prices to go up also declined three points to 37%.
Mom-and-pop landlord conditions continue to worsen. Sixty-seven percent of the respondents reported that mom-and-pop landlords were choosing to sell their properties — a fifteen-point jump from last month’s survey results.
“Mom-and-pop landlords are an important source of affordable housing. The pandemic and subsequent recession have put them under tremendous financial stress. We continue to advocate on their behalf,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Forty-seven percent of the respondents expect an increase in iBuyer transactions — a nine-point jump from the April survey results.
“With increased investor interest and tech-enabled platforms promising quick, hassle-free transactions, sellers will be tempted to accept instant offers. A REALTOR® is invaluable in evaluating the offer and facilitating the transaction for the seller’s benefit,” said Kentucky REALTORS® CEO, Steve Stevens. “iBuyers represent the buyer’s interest.”
- 44% expect house prices to increase
- 49% expect greater price-cutting
- 31% expect more houses to sell below the asking price
- 58% expect houses to stay on the market longer
- 48% anticipate an increase in the pace of new construction
- 41% anticipate an increase in the pace of new listings
The hot seller’s market is tempting do-it-yourself sales to save on real estate agents’ commissions. Forty-seven percent of the respondents expect an increase in For Sale By Owner (FSBO) transactions.
“The prospect of saving thousands of dollars in commissions is certainly alluring. However, pricing, marketing, and negotiating a sale requires expertise. There are also legal and regulatory requirements. A REALTOR® has the training, knowledge, and expertise to ensure a smooth transaction at the best price for the seller,” said Charles Hinckley, President of Kentucky REALTORS®.
The full report is available here.