Kentucky Home Price Growth To Moderate
Bidding Wars Discouraging Buyers
Potential Sellers Opting To Refinance
Fifty-eight percent of Kentucky REALTORS® reported that some of their sellers were opting to refinance instead of selling, according to the August 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. Eighty-seven percent of the 264 REALTORS® from across Kentucky, reported that the bidding wars were discouraging some of their buyers.
“Selling a home is often paired with buying another home as lifestyles change. Lack of buying options is preventing potential sellers from listing their current homes with many now opting to take advantage of record-low mortgage rates and refinance,” explained Vidur Dhanda, author of the survey. “The astounding recent price appreciation is expectedly giving buyers pause as they weigh their economic reality against the benefits of low mortgage rates.”
As part of an effort to harness the ears-to-the-ground knowledge of REALTORS®, the HousingIQ Survey of Kentucky REALTORS® is administered monthly to the Kentucky REALTORS® membership. The responses are analyzed and reported as the HousingIQ/Kentucky REALTORS® Confidence Index. In the August 2020 edition, additional questions were included to gather first-hand knowledge about the impact of the coronavirus on the Kentucky housing market.
The headline Confidence Index inched up three points to over 51. The emerging narrative is that year-to-date listings are still lagging compared to last year; although, year-to-date sales are higher. Additionally, nearly two-thirds of survey respondents expect more distressed sales in the next twelve months as pandemic-related financial pressures take their toll on homeowners.
This anticipated increase in distressed sales will present opportunities for single-family rental investors and 54% of the respondents expect increased sales to investors. 82% of the respondents reported that sellers were holding back as they couldn’t buy another home, presenting an opportunity for real estate professionals to collaborate and help balance the act of simultaneously selling and buying a home. With nearly half of the respondents ranking buyers looking to upgrade as a top-three customer segment and the tight inventories impeding home buying, there is continued opportunity for remodeling contractors and financial planners to bundle services.
In the next twelve months:
- 49% of respondents expect an increase in sales volume
- 35% anticipate increased foot traffic
- 46% expect houses to stay on market for fewer days
- 49% expect increased sales to first-time buyers
- 75% of respondents anticipate an increase in delinquencies
- 43% expect more houses to sell above asking price
- 54% expect increased sales to investors
“As the market begins to settle down, potential homebuyers should consult with the local market expert and evaluate their options while mortgage rates are at historic lows,” said Kentucky REALTORS® President Lester Sanders. “Despite the low inventory and bidding wars narrative, there are opportunities in different market segments.”
“A tool such as this report is invaluable to an industry that is as unpredictable this year as it has ever been”, said KYR Communication Director Paul Del Rio. “Our REALTORS’ expertise has been key to help brokers and allied industries plan for the future.”
The latest report is available here.