Kentucky Housing Market Vitality

Market Rank

twenty three

Kentucky metro area house prices are forecasted to outperform the national market over the next twelve months. Currently, the market is tracking the overall U.S. market. Compared to 12-months ago, Kentucky’s housing market has strengthened. Current local economic conditions support an estimated 5.3% increase in house prices over the next twelve months. Based on the housing market vitality of the nine metro housing markets which comprise it, Kentucky’s housing market ranks twenty third amongst all states and D.C. The three-month outlook is neutral.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on house prices. A value of 100 corresponds to conditions supporting current price appreciation; values less than 100 correspond to a dampening effect and values greater than 100 indicate a positive impact on house prices. A housing market vitality value can be interpreted as a growth rate. Hence, a reading of 105.8 can be interpreted as a 5.8% annualized increase in house prices.

Market Pulse

Sales Tracker October 2020 12-month change
Closed Sales Count 5,019 +7%
Distressed Sales Count 16 -76%
Median Sales Price $200K +14%
Median Days on Market 141 +34%
Months of Inventory 1.7 -55%
Pending Sales Count 8,116 +31%
The October 2020 year-to-date sales volume figure came in at $10.25 billion. With 2 months of data remaining to be collected, 2020 will almost certainly demolish records. Home sales were up for the fifth consecutive month in October and peaked over 5,000 units for the first time ever. 5,019 homes were sold in October 2020 compared to last year’s record of 4,476 (up 12%). Although the market’s performance seems to be cooling, it is doing so only slightly. Pending sales have risen over 30% each of the last three months and was up in double digits for all of 2020 with the exception of April and May. Distressed sales (foreclosures or short sales) were down 76% in October compared to October of 2019. Just 16 units sold as distressed, which is the lowest number on record in Kentucky.

Kentucky Metro Housing Markets

Kentucky is comprised of nine metro housing markets that account for nearly 58% of the state’s population. The Bluegrass State metro housing markets are unique in their demographics and local economies and exhibit trends that are distinct from the national and state narrative. Each metro market presents its own unique opportunity.

METRO AREA SITUATION OUTLOOK US METRO RANK (/402)
Bowling Green, KY Underperforming Negative 335
Cincinnati, OH-KY-IN Outperforming Positive 116
Clarksville, TN-KY Outperforming Positive 18
Elizabethtown-Fort Knox, KY Underperforming Positive 219
Evansville, IN-KY Underperforming Negative 344
Huntington-Ashland, WV-KY-OH Tracking Negative 293
Lexington-Fayette, KY Outperforming Positive 130
Louisville/Jefferson County, KY-IN Underperforming Positive 210
Owensboro, KY Tracking Negative 312

Industry Specialization

Kentucky’s state economy is specialized in Manufacturing and Other svcs. Mining, Information, and Pro Bus svcs industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.

Demographics

Compared to the U.S., there is a higher incidence of poverty amongst Kentucky residents and they have greater purchasing power. There are more high school graduates and a smaller proportion of the population is college educated. Kentucky’s population is comparatively less diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.

Data through November 2020