Kentucky Home Prices Leveling Off
Increased price-cutting by sellers as homebuyer enthusiasm tempers
Twenty-six percent of Kentucky REALTORS® anticipate an increase in price-cutting by sellers over the next twelve months, according to the May 2021 edition of the HousingIQ Survey of Kentucky REALTORS®. Twenty-seven percent of the 330 REALTORS® from across Kentucky, expect houses to stay on market for longer over the next twelve months.
“Homebuyers are increasingly unwilling to continue pushing up prices,” explained Vidur Dhanda, author of the survey. “With mortgage rates inching up, affordability will become a larger issue with potential buyers preferring to wait it out.” In the latest issue of the Home Purchase Sentiment Index, Fannie Mae reported that the percentage of consumers who said it is a good time to buy a home declined to 35% from 47% – the lowest reading of the monthly survey. “However, the lack of inventory and low pace of new construction will prevent any substantial dips,” said Dhanda.
The headline HousingIQ/Kentucky REALTORS® Confidence Index was mostly unchanged at 51.9. A value of 100 corresponds to all respondents agreeing that market conditions will improve, while a value of 50 corresponds to respondents anticipating no change in market conditions. The nearly four-point jump in the Buyer Power sub-index and one-point increase in the Price Expectation sub-index, point to a continued strong market that is turning buyer friendly.
The Homeowner Stress sub-index eased two points although, fifty-seven percent of the respondents anticipate a greater number of distressed sales. “Continued economic growth, homeowners’ equity cushion, and preemptive efforts by various agencies will likely prevent any crisis,” said Dhanda.
Sixty-one percent of the respondents said interest from out-of-state buyers will increase. “Our housing market has had a remarkable recovery and as our economy surges ahead, Kentucky will become a more attractive destination,” said Kentucky REALTORS® Communications Director, Paul Del Rio.
Forty-eight percent of the respondents anticipate an increase in the use of “office exclusive” listings. “Office exclusives offer sellers and buyers a convenient and confidential way to transact. In a tight market, they are an effective way to customize terms without the burden of evaluating a large number of offers,” said Kentucky REALTORS® CEO, Steve Stevens.
- 50% of respondents expect an increase in sales volume
- 70% anticipate increased demand for entry-level homes
- 62% anticipate increased interest from distressed property investors
- 61% anticipate increased interest from out-of-state buyers
- 26% of respondents expect increased price-cutting
- 27% expect houses to stay on the market longer
- 44% anticipate greater foot traffic
“As buyer enthusiasm wanes and sellers have to consider reducing the asking price, a local REALTOR® is invaluable in marketing the property and setting a competitive price,” said Charles Hinckley, President of Kentucky REALTORS®. “Sellers who are still on the fence should consult with a local expert.”
The full report is available here.