Kentucky housing market experiences second highest year ever
Lexington, KY (1/29/2019) – For the fourth year in a row, Kentucky’s real estate market set new sales records in most of the local market areas, despite the state-wide number being just shy of besting the 2017 mark. The 2018 state tally swelled to 52,305 units sold, Approximately 750 homes short of the 2017 mark of 53,058. Housing inventory and the time it took for homes to sell dropped slightly while the median home price in Kentucky climbed by almost three percent.
Kentucky home sales in December fell 5.2% to 3,690 units, down from 3,891 one year ago. Despite this, 13 of the 20 local area markets in Kentucky saw an increase. Six of those areas saw double-digit increases with the Ashland area leading the way with an increase of just under 20%. The South-Central Kentucky Assoc. of REALTORS® and the Mayfield-Graves Co. Board came in just behind that at 18%. The SCKY Association is up 44% over five years ago.
Rip Phillips, President of Kentucky REALTORS®, said that continually dwindling inventory is partly to blame. “In the Louisville and Lexington areas, we are seeing a greater shortage of desirable homes on the market. As a result, homes are selling more quickly but there are obviously fewer of them to go around”, he said. “It looks like the Kentucky market may continue to slow until inventory levels climb a bit closer to the six-month mark.”
Nationwide, existing-home sales decreased in December, according to the National Association of Realtors®, after two consecutive months of increases. Transactions were down 6.5% over last month and over 10% compared to December 2017. Lawrence Yun, NAR’s chief economist, says current housing numbers are partly a result of higher interest rates during much of 2018. “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
The Kentucky median home price fell by 4.2% in December for the second month in a row. It was down to $128,584 (4.2% decrease) in December while the year-end 2018 number was up 2.7% from 2017 at $131,995. The 2018 year-end housing inventory number fell even further. It dropped to 4.2 months of inventory, which is down 1.4% from 4.3 months in 2017.
Days on market levels fell again as a more frantic pace dominated the urban home sales landscape this year. December saw houses on the market for an average of 106 days, down from 117 one year ago, a decrease of almost ten percent. Year-end numbers were also down, though not as dramatically. The 2018 level averaged at 110 days on market.
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Kentucky REALTORS® is one of the largest and most influential associations in Kentucky. Founded in 1922, Kentucky REALTORS® represents more than 11,000 REALTORS® who are involved in all aspects of real estate, including residential and commercial real estate brokers, sales agents, developers, builders, property managers, office managers, appraisers, and auctioneers.