March 2020

Kentucky Housing Market Vitality

forecast

Track

Kentucky metro area house prices are forecasted to track the national market. Current local conditions support an estimated 7.7% increase in the next twelve months. Kentucky’s housing market vitality, based on the nine metro housing markets which comprise it, is the same as that of the overall U.S. and currently ranks the state as twentieth in the nation. Recent changes in local conditions suggest the possibility of improvement in short-term performance.

Housing Market Vitality

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

Market Pulse

Sales Tracker Aug 2020 12-month change
Closed Sales Count 5,475 +7%
Distressed Sales Count 21 -80%
Median Sales Price $200K +14%
Median Days on Market 172 +72%
Months of Inventory 1.7 -48%
Pending Sales Count 8,920 +31%
Home sales were up for the third consecutive month since the housing market roared back to life in June. 5,475 closings took place in Kentucky, up almost 7% over August of 2019. That follows an almost 15% increase experienced in July. Year-to-date sales surged to 35,705, up 4% from August of last year. The number of homes available on the market still hovers at near all-time lows with 1.74 months of inventory in August. This figure is down over 40% for the third consecutive month and down almost 48% over August 2019.

Kentucky Metro Housing Markets

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

METRO AREA FORECAST US METRO RANK (/402)
Bowling Green, KY Underperform 372
Cincinnati, OH-KY-IN Outperform 159
Clarksville, TN-KY Outperform 75
Elizabethtown-Fort Knox, KY Underperform 394
Evansville, IN-KY Outperform 179
Huntington-Ashland, WV-KY-OH Underperform 368
Lexington-Fayette, KY Track 322
Louisville/Jefferson County, KY-IN Outperform 59
Owensboro, KY Underperform 291

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 Bluegrass State 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.