Kentucky REALTOR® News
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).
Pending sales in October were down about 11%, indicating that the housing market is continuing its gradual slowdown into November. “Now is a great time to think about selling if you have been putting it off”, said Charles Hinckley, President of Kentucky REALTORS®. “Inventory is rising which means there is more opportunity for consumers to find that new perfect fit for them.”
Nationally, existing-home sales increased in October, marking two straight months of growth, according to the National Association of Realtors®. Two of the four major U.S. regions saw month-over-month sales climb, one region reported a drop and the fourth area held steady in October. On a year-over-year basis, each region witnessed sales decrease.
"Home sales remain resilient, despite low inventory and increasing affordability challenges," said Lawrence Yun, NAR's chief economist. "Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment."
The median sale price of homes in Kentucky rose slightly to $223,000 which nearly tied the record high from July of $225k. The remarkable statistic remains the jump in median price from just before the pandemic. October 2019 saw that number reach $175,500. The October 2021 figure shows a 25% increase in just 2 years. “Wealth building has always been a key benefit of property ownership”, said Kentucky REALTORS® C.E.O. Steve Stevens. “The value increases over the past 18 months have affected the consumer’s ability to enter the housing market, but homeowners have simultaneously enjoyed record equity gains.”
Housing inventory dropped slightly from last month to 2.2 months. Experts agree that a stable housing market contains about 6 months of inventory.
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.
KYR and the Kentucky REALTOR® Institute are excited to announce the launch of “Fairhaven: A Fair Housing Simulation”.
This is a new course that is offered FREE for Kentucky REALTORS® (KYR) members and provides CE/PLE hours for licensees. It was written several months ago and submitted for approval from the Kentucky Real Estate Commission as a for-credit course. Now, KYR Members may now go to the Kentucky REALTOR® Institute website and register for the course and receive continuing education or post-licensing credit in the Commonwealth.
“Fairhaven: A Fair Housing Simulation” was adapted with permission from the Fairhaven simulation developed and offered by the National Association of REALTORS® (NAR) making Kentucky the first state where this course is available for credit. The original course from NAR uses the power of storytelling to help members identify, prevent, and address discriminatory practices in real estate. Inspired by real stories, this innovative online experience has agents work against the clock to sell homes in the fictional town of Fairhaven while confronting discrimination in the homebuying process. Learners will also walk in the shoes of a homebuyer facing discrimination. The training provides customized feedback that learners can apply to daily business interactions.
“REALTORS® have a track record of improving the communities where they work and live”, said Steve Stevens, CEO of Kentucky REALTORS®. “Combating discrimination, whether it is intentional or not, within the housing industry is just another way to strengthen our communities and make the American dream of homeownership a reality for more Kentuckians”.
To register for the course visit the KRI Fairhaven page at https://kyrealtorinstitute.com/fairhaven-fair-housing-simulation.
For more information contact Nicole Knutdson or Suzanne Reeves at 859.263-7377.
It was only two years ago (2019) that the sales volume figure for the year for Kentucky residential sales topped the ten-billion-dollar mark. It was a milestone that was the result of a booming economy and record low unemployment rates. This caused more homes to sell but the median price did not increase sharply. The pandemic ushered in a time when home prices soared quickly. This, coupled with record sales counts, meant that sales volume would hit record highs more quickly than ever. For example, 2021 only needed the first three fiscal quarters to top that ten-billion-dollar level. Year-to-date sales volume through September reached $10.74 billion (up 20% over 2020).
Closed sales were down slightly to 5,163 from Sept. 2021 (5,199). Pending sales in Sept. were down almost 14% over last year, signaling a continued slowing of the frenzied market pace of the spring and early summer. “We anticipate a steady pace of listings coming to the market”, said Charles Hinckley, President of Kentucky REALTORS®. “A number of factors are pointing to more choices being available to those that are ready to purchase property.”
Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
"Some improvement in supply during prior months helped nudge up sales in September," said Lawrence Yun, NAR's chief economist. "Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year."
The median sale price of homes in Kentucky remained steady at $200,000, which is up by eleven percent over last year. “Prices are finally leveling off”, said Kentucky REALTORS® C.E.O. Steve Stevens. “We will continue to advocate, for policies and programs that encourage more new home construction to help ease the strain on inventory.”
Housing inventory continues to hold at 2.3 months in Kentucky, while the nationwide average sat at 2.4 months in September. Experts agree that a stable housing market contains about 6 months of inventory.
Distressed sales in September remained low at only 8 units. This indicates that programs put in place, such as mortgage forbearance, were effective in keeping Kentuckians in their homes. This could change soon, however, as programs will begin to expire. It remains to be seen how many new listings will be created if owners that were adversely affected by the pandemic can’t afford their current mortgage.
One of the best indicators of the following month’s home sales is pending sales. For the third consecutive month, year-over-year pending home sales continue to drop, signaling a slow and steady recovery to a more sustainable market pace. Pending sales in August dropped slightly over ten percent to 7,690 (from 8,593 in August of 2020). Closed sales were down just under three percent at 5,458. In August, Kentucky’s year-to-date sales stand at 38,379. This is a 7.5% increase from 2021 when that number reached 35,704.
Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. Year-over-year, sales dropped 1.5% from a year ago (5.97 million in August 2020).
"Sales slipped a bit in August as prices rose nationwide," said Lawrence Yun, NAR's chief economist. "Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory."
The median sale price of homes in Kentucky jumped by ten percent from $199,900 to reach $220,000. This figure is down just slightly from July’s record high of $225k. “This plateau of the sale price trend couldn’t have come at a better time”, said Kentucky REALTORS® C.E.O. Steve Stevens. “Generally, the fall and winter months see a slowing down of the market’s pace. We’re hopeful that growth in inventory will continue to moderate prices a bit further.”
70% of Kentucky REALTORS® said that their buyers were waiting for prices to stabilize, according to the August 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. “Amidst the uncertainty caused by the Delta variant, struggling homeowners who are also exiting mortgage forbearance should consult with their local market experts”, said Charles Hinckley, President of Kentucky REALTORS®. “Last year’s price gains have likely created an equity cushion. A REALTOR® can educate them about their options.”
Housing inventory continues to hover at a critically low level. Though the figure stands at more than double what it was in the spring, it still would take only about 2 months to sell every home currently listed in the Commonwealth. Experts agree that a stable housing market contains about 6 months of inventory.
Distressed sales in Kentucky sat at just 12 units in August. This is identical to the August 2020 figure.
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.”