Kentucky Home Price Growth To Moderate
Potential Sellers Held Back By Inability To Buy Another Home
Sixty-eight percent of Kentucky REALTORS® said that the pent-up demand from spring had not eased up and demand was now stronger than this time last year, according to the July 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. Only two out of five of the 336 REALTORS® from across Kentucky, expected home prices to increase more than the last twelve months.
“Home price growth will moderate as sellers are motivated to take advantage of the current market strength,” explained Vidur Dhanda, author of the survey. Over three out of five respondents anticipate more distressed sales in the next twelve months and over a quarter of the respondents anticipate listing prices to be reduced.
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 July 2020 edition, additional questions were included to gather first-hand knowledge about the impact of the coronavirus on the Kentucky housing market.
The emerging narrative is that the market has rebounded from the spring COVID-19 slump with the headline Confidence Index and all three sub-indices remaining flat in July. Nearly three out of five survey respondents expect an increase in listings activity, as the foreclosure moratorium expires and forbearance programs wind down.
The anticipated uptick in distressed sales will present opportunities for single-family rental investors. With 75% of the respondents reporting that sellers were holding back as they couldn’t buy another home, there is an opportunity for real estate professionals to collaborate and help balance the act of simultaneously selling and buying a home. With nearly 40% of respondents ranking buyers looking to upgrade as a top-three customer segment and the tight inventories impeding home buying, there is an opportunity for remodeling contractors and financial planners to bundle services.
In the next twelve months:
- 49% of respondents expect an increase in sales volume
- 32% anticipate increased foot traffic
- 46% expect houses to stay on market for fewer days
- 40% expect increased sales to first-time buyers
- 80% of respondents anticipate an increase in delinquencies
- 20% expect more houses to sell below asking price
- 52% expect increased sales to investors
“We’ve experienced a remarkable recovery,” said Kentucky REALTORS® President Lester Sanders. “However, there are headwinds. For sellers on the fence, now is a good time to consult with a local market expert and evaluate the options.”
“The swift rebound in the housing market showcases how Kentucky REALTORS® have successfully responded to the pandemic’s challenges. As this unprecedented situation evolves, KYR will continue to support its membership with actionable insights,” said KYR C.E.O. Steve Stevens.
The full report is available here.