Kentucky Housing Market Vitality

Market Rank

eighteen

Kentucky metro area house prices are forecasted to track 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 6.9% 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 eighteenth 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 February 2021 12-month change
Closed Sales Count 3,484 +1.8%
Distressed Sales Count 13 +18%
Median Sales Price $195K +15%
Median Days on Market 303 +103%
Months of Inventory 1.87 -51%
Pending Sales Count 7,044 +15%
The low inventory in Kentucky’s housing market, along with slowly rising mortgage interest rates, is finally influencing the sales boom we have experienced since May of 2020. February closings topped out at 3,484, up just below 2% from February of 2020 (3,424). The median sale price of homes in Kentucky for February was up once again. The figure of $195,000 was a 15.4% increase over the $169,000 we saw in February of 2020. The statewide average home price in Kentucky has now been above $200k for twelve consecutive months. It rose almost 16% over last February topping out at $228,961. Sales volume numbers are still posting large gains as February saw that figure surge again to just under $800 million, up 18% from $667 million last February.

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 363
Cincinnati, OH-KY-IN Outperforming Positive 114
Clarksville, TN-KY Outperforming Positive 31
Elizabethtown-Fort Knox, KY Underperforming Neutral 223
Evansville, IN-KY Underperforming Neutral 226
Huntington-Ashland, WV-KY-OH Underperforming Negative 341
Lexington-Fayette, KY Underperforming Negative 276
Louisville/Jefferson County, KY-IN Tracking Positive 130
Owensboro, KY Tracking Negative 277

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 February 2021