Kentucky REALTOR® News
New listings hitting the market increased for the fifth consecutive month and active listings are also trending upward. These indicators signal that the recent price surge will soon peak as more options will become available to consumers. Those hesitant to list their homes for fear of not finding a new property to move into may also be spurred into listing by the increasing inventory, thereby boosting the listing count further. Closed sales in July reached 5,393. That figure is down slightly (at 7%) from 5,943 in July 2020. The year-to-date closings figure climbed to 32,485. This is a 9% increase from July of 2020 when that number reached 29,811.
Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums, and co-ops, grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).
"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," said Lawrence Yun, NAR's chief economist. "Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."
The median sale price of homes in Kentucky surged 12.5% from $200k to reach $225,000. This figure sat at $179,000 just 2 years ago. “We are definitely looking forward to a moderating of the sale price of homes”, said Kentucky REALTORS® C.E.O. Steve Stevens. “While it’s good that consumers are seeing their equity grow, the fact that so many Kentuckians remain priced out of the market is unfortunate.”
Nationally, REALTORS® continue to advocate for property owners as it relates to rental properties. “The eviction relief programs are dispersing money at an alarmingly slow pace”, said Kentucky REALTORS® President Charles Hinckley. There are several reasons for the delay in delivering the money, according to a report published by the Aspen Institute and COVID-19 Defense Projection, including high documentation burdens, long payment timelines, and insufficient infrastructure for rental assistance support. Hinckley continued, “REALTORS® will continue to fight for the rights of all property owners. There is help available and we can all do our part to let our leaders know that processing this aid is paramount to letting Kentuckians remain in their homes while our small business owners receive the funds they need to bring their accounts current.”
Distressed sales in Kentucky remained low in July. There were just 13 last month, down 32% from last year’s figure of 19.
State and local organizations are distributing federal rental assistance in their communities. This money can help landlords and renters who are struggling to keep up with rent and other bills.
Many programs take applications from both landlords and renters. The following information is taken from the Consumer Financial Protection Bureau (CFPB) website:
Rental assistance programs for Kentucky
Program name: Healthy at Home Eviction Relief Fund
Program type: State
Get started: https://teamkyhherf.ky.gov/
Lexington-Fayette Urban County Government
Program name: Housing Stabilization Partnership Program
Program type: County
Get started: https://www.lexingtonky.gov/how-do-i-get-help
Louisville/Jefferson County Metro Government
Program name: Jefferson County Rental Assistance
Program type: County
Get started: https://www.stopmyeviction.org/form
Last month’s year-over-year pending sales count showed a dip for the first time since the COVID-19 pandemic began. Though down slightly at just over one percent, this signals good news. The drop in pending contracts is due to more listings coming to the market rather than homes sales slipping. The falling number of active listings leveled off in May and then rose in June to about 11,600 which is the highest level since December of 2020.
“It’s wonderful to see Kentuckians beginning to list more homes”, said Charles Hinckley, President of Kentucky REALTORS®. “It serves to moderate prices, reduces instances of bidding wars, and can encourage other potential sellers to enter the marketplace as well.”
Closed sales in June were up just three percent to 5,553 from one year ago (5,392). The year-to-date closings figure surged to 26,984. This is a 13% increase from June of 2020 when the COVID affected count sat at 23,845.
Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020).
"Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales," said Lawrence Yun, NAR's chief economist. "Home sales continue to run at a pace above the rate seen before the pandemic." The median sale price of homes in Kentucky for April was up about ten percent, to $205,000. Year-to-date, Kentucky’s median sale price is up almost twelve percent at $198,000.
When the market is fueled by high buyer demand coupled with low inventory, historically low interest rates have a limited effect on real estate prices and what consumers can ultimately afford. Kentucky REALTORS® C.E.O. Steve Stevens says that this trajectory is finally easing some concerns. “Many Kentuckians have had to sit this market out since prices surged so quickly over the past 12 months”, he said. “I think we are seeing the light at the end of the tunnel here and folks who have been saving up should soon have both the inventory to choose from and a price tag they can afford.”
June’s sales volume spiked to $1.4 billion, up 20% from $1.2 billion just one year ago. The median sale price rose almost 17%, from $192,000 to $224,000. Year-to-date, the median home sales price is up about 14% to just over $206,000.
While the federal eviction moratorium is ending June 30, Kentucky’s Healthy at Home Eviction Relief Fund (HHERF) is open until Sept. 30, 2022, and has about $200 million left to assist Kentuckians with up to 15 months of rent and utilities. To date, more than 5,500 rent and utility payments totaling more than $20.3 million in assistance have been made
Last week, the Kentucky Housing Corporation, an important partner in administering the HHERF, paid out more than $2 million from the fund to Kentuckians in need, which is up 15% from the week before.
She received her real estate license in 1975 and her broker license in 1978 and was, in many ways, a pioneer in Kentucky real estate over the past 46 years. Ann McDonald was the broker of four real estate offices located in Lexington, Winchester, Georgetown, and Richmond for Coldwell Banker McMahan Co.
Until recently, Ann served on the board of directors for Kentucky REALTORS® and in 2009 was honored as KYR’s REALTOR® of the Year. In 2012, she served as Kentucky REALTORS® President. On the local level, she was a member of the Lexington-Bluegrass Association of REALTORS® (LBAR). McDonald served as its president in 2005, was awarded LBAR REALTOR® of the Year in 2007, and has served on the Board of Directors. She was also active with the REALTOR® Community Housing Foundation at LBAR.
On the national front, McDonald was involved with many National Association of REALTORS® (NAR) committees, such as governmental affairs, finance, strategic planning, legal affairs and RPAC (REALTOR® Political Action Committee). She served as state RPAC Trustee and was Chair of the Trustees in 2016. McDonald was also honored with induction into the national RPAC Hall of Fame in 2016. Her pinnacle achievement was serving as 2017 Vice President for Region 4 of the National Association of REALTORS® comprised of the REALTORS® from the states of Kentucky, North Carolina, South Carolina, and Tennessee.
For many years, she attended national REALTOR® meetings in Washington gathering with Senators and Representatives as an advocate for important issues affecting the real estate industry. McDonald served her community as a member of the Lexington, Winchester, Georgetown, and Richmond Chambers of Commerce. In addition, she attended past Commerce Lexington trips to other cities and also participated in “fly-ins” to Washington, DC.
“After almost a half-century of involvement, Ann McDonald made tremendous contributions to this association and the entire real estate industry”, said Kentucky REALTORS® President Charles Hinckley. “Up until just a few months ago, she was still giving of her time and talents as a member of the leadership of RPAC. Her leadership will be missed, but her legacy will remain through her daughter who is active and involved in both KYR and RPAC”, said Hinckley.
“I was always impressed by how strongly Ann believed in the importance of our association being the voice of real estate”, said KYR CEO Steve Stevens. “Many folks across our state are involved in advocacy and political action as a result of her encouragement.”
The aggregate volume in pending home sales contracts for the state of Kentucky reached a record high last month. $2.2 billion in transactions were under contract in April 2021. This is up 47% over the $1.5 billion in pending sales volume for both April 2020 and 2019. Home sales numbers continue to be up year-over-year, but the meteoric rise in volume is largely due to the higher prices that the current housing market is commanding.
As expected, closed sales are up once again. In April, 4,738 homes sold. This is up 25% from 3,793 in April of 2020. The pending sales count was also up 25%, reaching 8,413 for the month.
Nationally, existing-home sales waned in April, marking three straight months of declines, according to the National Association of Realtors®. All but one of the four major U.S. regions witnessed month-over-month drops in home sales, but each registered double-digit year-over-year gains for April. The Southern region accounted for 44% of all existing home sales across the nation.
"Home sales were down again in April from the prior month, as housing supply continues to fall short of demand," said Lawrence Yun, NAR's chief economist. "We'll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
The median sale price of homes in Kentucky for April was up about ten percent, to $205,000. Year-to-date, Kentucky’s median sale price is up almost twelve percent at $198,000.
“Across the Commonwealth, and the entire nation, housing inventory continues to be the main factor in both rising prices and the speed at which homes are going under contract”, said Charles Hinckley, President of Kentucky REALTORS®. “We encourage anyone considering listing a home for sale to consult with a REALTOR® to learn about all options available and how the market will react to their particular property.”
Kentucky REALTORS® C.E.O. Steve Stevens says that although this market pace is not sustainable for the long term, experts are not anticipating a crash. “Most economists agree that rising mortgage rates, more homes being added to the market, and slightly waning buyer demand will eventually lead to a market correction”, he said. “This should moderate prices and bring home ownership back into reach for those who might have been priced out of the market in recent months.”
Citing widespread vaccinations and an early reopening, a second major rating agency has published a positive economic outlook for Kentucky. The Moody’s Analytics report is the latest in a string of positive economic news highlighting that the commonwealth is poised to prosper as the state emerges from the pandemic.
The report notes “mass vaccinations will be the driving force behind a sustained recovery in consumer services,” “the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services,” that Kentucky’s “manufacturing industry has outperformed the nation’s” since an initial downturn nationally last year and “payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”
“Consumer industries are ripe for a rebound as mass vaccinations pave the way for increased local spending in the second half of 2021,” according to Moody’s analysis.
Gov. Beshear, in response to the latest positive economic news for Kentucky, said “Two major rating agencies, the U.S. Treasury Department, Site Selection magazine and our own sales tax receipts show while our economy is prepared to boom, this is just the beginning. Our economy is open, and we are announcing new, good-paying jobs every week. We must seize this moment to create a better commonwealth with more opportunities for our people in every corner of Kentucky.”
From the Moody’s report:
“Kentucky’s economy will improve after a modest pullback late last year. Mass vaccinations will be the driving force behind a sustained recovery in consumer services, while manufacturing will fare well once it gets past some near-term supply disruptions.”
“Kentucky’s economy lagged the U.S. prior to the pandemic, but the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services. Payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”
“Manufacturing was one of the hardest-hit industries during the initial downturn last year, with employment contracting as much as 18% compared with 11% nationally. Since then, KY’s manufacturing industry has outperformed the nation’s, with more than 80% of lost manufacturing jobs being recouped.”
The Moody’s report is just the latest positive economic news for Kentucky.
The Governor announced that year-to-date, businesses have announced the planned and ongoing creation of nearly 2,750 full-time, Kentucky-resident jobs. That figure nearly doubles the 1,430 jobs announced throughout the same span in 2020. Businesses announced plans for 33 projects in Kentucky comprising nearly $1.5 billion in planned investment in addition to the more than 2,700 jobs.
Earlier this month, Fitch Ratings improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million.
While most Kentucky businesses have been fully open for months, the economy should be further ready to thrive when all businesses are able to fully reopen on June 11.
On May 28, all indoor and outdoor events of any size and businesses of any capacity can increase to 75% capacity. Just two weeks later, the state’s emerging economy is set for liftoff as final capacity restrictions related to COVID-19 end Friday, June 11. On the same day, the state will also eliminate the mask mandate for all Kentuckians with the exception of places where people are the most vulnerable. The Governor said he was keeping some capacity limits and the mask mandate in place until June 11 in order to give 12- to 15-year-old Kentuckians enough time to receive both doses of the vaccine before all restrictions are lifted.
With the Moody’s report evidence of the importance of vaccinations allowing Kentucky to safely and sustainably reopen its economy, Gov. Beshear encouraged all of those eligible to get their vaccine. As of May 18, 1,932,189 Kentuckians have received at least one dose.
The year-over-year sales number increase marathon continues. The only factor currently lurking that might threaten continued growth is the lack of homes hitting the market. The month of March saw 4,711 closings in Kentucky, up over nine percent from one year ago. (4,306).
Existing-home sales fell in March, marking two consecutive months of declines, according to the National Association of Realtors®. The month of March saw record-high home prices and gains. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 3.7% from February to a seasonally adjusted annual rate of 6.01 million in March. Sales overall climbed year-over-year, up 12.3% from a year ago (5.35 million in March 2020).
"Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market," said Lawrence Yun, NAR's chief economist. "The sales for March would have been measurably higher, had there been more inventory," he added. "Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising."
The median sale price of homes in Kentucky for March was up once again. At $199,000, the median closing price was up about 11% over March of 2020 ($179,000). The statewide average home price in Kentucky jumped to $235,653. This is an increase of just under 12% over March of 2020 and about $7k over the average price in February of this year. Sales volume numbers are still swelling. March saw that figure rise to $1.11b statewide. This is up 22% from March of last year, and over 30% from March 2019.
Pending sales are up 21% over last March indicating a strong spring selling season. “Inventory remains the key factor in how the market will perform into the summer”, said Charles Hinckley, President of Kentucky REALTORS®. “We’re hopeful that an influx of new sellers, as well as some new home construction, will give Kentuckians more homes to choose from as they relocate.”
Just 13 homes sold as distressed in March, matching the figure from February. This number continues to hover at record-low levels due to the various recourse offered to homeowners behind on payments due to the pandemic.
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. February closings topped out at 3,484, up just below 2% from February of 2020 (3,424).
Nationally, pending home sales dipped for a second straight month in February, according to the National Association of Realtors®. Each of the four major U.S. regions witnessed month-over-month declines in February, while results were mixed in the four regions year-over-year. The Pending Home Sales Index dropped 10.6% to 110.3 in February. Year-over-year, contract signings fell 0.5%. An index of 100 is equal to the level of contract activity in 2001.
"The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift, but contracts are not clicking due to record-low inventory," said Lawrence Yun, NAR's chief economist. "Only the upper-end market is experiencing more activity because of reasonable supply," he continued. "Demand, interestingly, does not yet appear to be impacted by recent modest rises in mortgage rates."
The median sale price of homes in Kentucky for February was up once again. The figure of $195,000 was a 15.4% increase over the $169,000 we saw in February of 2020. The statewide average home price in Kentucky has now been above $200k for twelve consecutive months. It rose almost 16% over last February topping out at $228,961. Sales volume numbers are still posting large gains as February saw that figure surge again to just under $800 million, up 18% from $667 million last February.
“While buyers are keeping an eye on rising mortgage rates, there is still a huge demand for properties out there”, said Steve Stevens, CEO of Kentucky REALTORS®. “We’re hopeful that the spring thaw will bring some new sellers into the market.”
“Folks may have been waiting for the best time to sell to get the most equity out of the property they have cared for so far”, said Charles Hinckley, President of Kentucky REALTORS®. “A housing market like this one offers Kentuckians, who may have been on the fence about whether to sell, the opportunity to get creative about their future. Cashing in on the wealth-building that homeownership provides is helping to start writing new chapters for some sellers.”
Just 13 homes sold as distressed in February. Consumers facing the prospect of foreclosure may now have would have more time before facing foreclosure under rules proposed this week by the Consumer Financial Protection Bureau. The set of proposed rules, which the regulator will seek public comment on, is intended to give both servicers and borrowers the “tools and time” needed to prevent a deluge of foreclosures.
Steve Stevens, C.E.O. of Kentucky REALTORS®, is being honored by the NATIONAL ASSOCIATION OF REALTORS® with the REALTOR® association Certified Executive (RCE) designation, which recognizes exceptional efforts made by REALTOR® association executives.
Stevens is one of over 500 REALTOR® association executives who have achieved this mark of excellence. Local and state association executives who hold the RCE designation represent REALTORS® in 49 states/territories.
“This is truly an honor, and I am very proud to be receiving this designation. It is a high point in my career as an association executive,” Stevens said.
Prior to becoming a candidate for the RCE designation, applicants must document their association management and academic experiences. Once they have completed this first step, eligible candidates must successfully complete a multiple-choice exam, which is based on a comprehensive understanding of association operations and management practices. Candidates must demonstrate knowledge of areas critical to REALTOR® association management, including association law, governance, and issues related to member services. To retain the designation, RCEs must be recertified every four years.
Stevens has served as C.E.O. of Kentucky REALTORS® since 2016.