Kentucky Homebuyer Enthusiasm To Push Prices Higher
Slower Pace of New Listings Forcing Bidding Wars
Forty-five percent of Kentucky REALTORS® said that a greater number of their buyers were returning to the market according to the June 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. Sixty-five percent of the 344 REALTORS® from across Kentucky reported that their buyers were not expecting lower prices.
“Home prices will be pushed higher as investors and consumers compete in a low inventory environment made tighter by reluctant sellers,” explained Vidur Dhanda, author of the survey. One-third of the respondents reported a slower pace of new listings, and over one-half of the respondents said that their buyers were facing bidding wars.
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 June 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 prices will continue to trend up in the next twelve months; although, growth in transaction volumes will remain muted. Sustained decreases in the Buyer Power Index point to the remarkable strength of the market, and the drop in the Homeowner Stress Index reflects the success of government actions in protecting homeowners. Single-family rental investors could have valuable opportunities as government support and forbearance plans wind down. With nearly 40% of respondents ranking buyers looking to downsize as a top-three customer segment, there is an opportunity for real estate professionals and financial planners to bundle services.
In the next twelve months:
- 48% of respondents expect an increase in sales volume
- 42% anticipate increased foot traffic
- 49% expect houses to stay on market for fewer days
- 49% expect increased sales to first-time buyers
- 76% of respondents anticipate an increase in delinquencies
- 24% expect more houses to sell below asking price
- 56% expect increased sales to investors
“The uptick in pending sales and sustained improvement in the Confidence Index shows the market is well on its way to recovery. Sellers considering listing their homes should consult with their local market expert to take advantage of the bidding wars,” said Kentucky REALTORS® President Lester Sanders.
Almost two-thirds of the realtor respondents reported no change in their ability to conduct business during June and over 20% reported an improvement. “KYR has successfully helped its membership work through the challenges posed by COVID-19. As the recovery strengthens, KYR will continue to support its membership with actionable insights,” said KYR C.E.O. Steve Stevens.
The full report is available here.