Kentucky Homebuyers Bid Up Prices as Sellers Hold Back
Over three out of five Kentucky REALTORS® – 61% – said that their sellers were holding back listings due to current economic uncertainty, according to the May 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. Almost 60% of the 374 REALTORS® from across Kentucky reported that their buyers had started to return to the market.
“Home prices are gaining due to tight inventories that have further shrunk because of reluctant sellers. The survey results highlight the beneficial impact of government actions in protecting homeowners. What remains to be seen is how fast sellers feel confident about their economic situation and return to the market,” explained Vidur Dhanda, author of the survey.
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 May 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 likely trend up in the next twelve months; although, growth in transaction volumes will remain low. As sellers return to the market, there will be pressure to reduce listing prices to attract buyers. Single-family rental investors could have valuable opportunities as government support and forbearance plans wind down.
In the next twelve months:
- 36% of respondents expect an increase in sales volume
- 35% anticipate increased foot traffic
- 34% expect houses to stay on market for fewer days
- 35% expect increased sales to first-time buyers
- 81% of respondents anticipate an increase in delinquencies
- 39% expect more houses to sell below asking price
- 58% expect increased sales to investors
“Home prices are gaining due to increased buyer activity and tight inventories. As the full economic impact of the pandemic plays out on homeowners and inventory starts to rebound, there may be downward pressure on prices. A local market expert will be invaluable in helping sellers correctly price the listing and advising buyers on negotiating through a bidding war,” said Kentucky REALTORS® President Lester Sanders.
Almost a third of the realtor respondents reported an improvement in their ability to conduct business during May. “KYR has proactively helped its membership work through the challenges posed by COVID-19,” said KYR C.E.O. Steve Stevens. “By providing new insights about the Kentucky housing market, KYR is now enabling the eco-system to partner and advance the market. For example, with nearly 3 out of 5 REALTORS® anticipating increased sales to investors, property management companies and lenders can collaborate to provide packaged services”, explained Stevens.
The latest report is available here.