Kentucky Housing Market Vitality

Market Rank

forty-one

Kentucky metro area house prices are forecasted to track the national market over the next twelve months. Currently, the market is underperforming the overall U.S. market. Compared to 12-months ago, Kentucky’s housing market has strengthened. Current local economic conditions support an estimated 14.1% increase in house prices over the next twelve months. Based on the housing market vitality of the nine metro housing markets which comprise it, Kentucky’s housing market ranks forty-first amongst all states and D.C. The three-month outlook is negative.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on house prices. A value of 100 corresponds to conditions supporting current price appreciation; values less than 100 correspond to a dampening effect and values greater than 100 indicate a positive impact on house prices. A housing market vitality value can be interpreted as a growth rate. Hence, a reading of 105.8 can be interpreted as a 5.8% annualized increase in house prices.

Market Pulse

Kentucky REALTOR® confidence holds steady. Softening homebuyer demand to rein in price growth. More »

Sales TrackerOctober 202112-month change
Closed Sales Count4,515-14%
Distressed Sales Count9+50%
Median Sales Price$223K+12%
Months of Inventory2.2-4%
Pending Sales Count6,947-11%
Year-over-year October home sales dropped by 14%, the largest decline since the pandemic began. Even though closings only reached 4,515, that still bested the number of closings in October 2019 (4,476) which is just before the pandemic began affecting businesses in the U.S. 2021 year-to-date closings reached 47,803 which is 4.7% above the mark set in October of 2020 (45,649).Sales volume continues to outpace last year’s figures. Through October, closing sales volume totaled $11.9 billion. This is over 17% ahead of the 2020 year-to-date volume amount of $10.1 billion. The Kentucky housing market is on-track to shatter last year’s record sales volume of $12.4 billion and nearly double the figure from just five years ago.

Kentucky Metro Housing Markets

Kentucky is comprised of nine metro housing markets that account for nearly 58% of the state’s population. The Bluegrass State metro housing markets are unique in their demographics and local economies and exhibit trends that are distinct from the national and state narrative. Each metro market presents its own unique opportunity.

METRO AREASITUATIONOUTLOOKUS METRO RANK (/402)
Bowling Green, KYUnderperformingPositive248
Cincinnati, OH-KY-INUnderperformingNegative293
Clarksville, TN-KYUnderperformingPositive139
Elizabethtown-Fort Knox, KYUnderperformingNeutral244
Evansville, IN-KYUnderperformingPositive226
Huntington-Ashland, WV-KY-OHUnderperformingNegative371
Lexington-Fayette, KYUnderperformingPositive241
Louisville/Jefferson County, KY-INUnderperformingNegative281
Owensboro, KYUnderperformingNegative336

Industry Specialization

Kentucky’s state economy is specialized in Manufacturing and Other svcs. Mining, Information, and Pro Bus svcs industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.

Demographics

Compared to the U.S., there is a higher incidence of poverty amongst Kentucky residents and they have greater purchasing power. There are more high school graduates and a smaller proportion of the population is college educated. Kentucky’s population is comparatively less diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.

Updated December 30, 2021 with data through November 2021