Kentucky REALTOR® News
COVID-19 had an adverse, albeit short, impact on the Kentucky housing market this spring. Higher pending contracts over the past two months indicated that sales would come roaring back. June would not disappoint. 5,426 closings took place in Kentucky, up a whopping 13% over June of last year. Year-to-date sales climbed to 24,159. This is 1% greater than sales through June of 2019 which peaked at 23,945.
Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 20.7% from May to a seasonally adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The median sale price of homes in Kentucky continues to climb. The June median price, up from $183,000 in June 2019, rose 5% to $192,00. The statewide average home price hit $224,195. Sales volume rebounded strongly, up 45% from last month ($837.9 million) to $1.05 billion. That figure also marks an increase of almost 17% from June of 2019. This surge raises the year-to-date sales volume 6.5% ahead of 2019’s figure at $5.1 billion.
The number of homes available on the market hit a record low for the state for the second month in a row. There is now less than 2 months of inventory in Kentucky for the first time since record-keeping began. The figure currently sits at 1.96 months.
“The housing market rebound in June shows that REALTORS® responded admirably to the health and safety recommendations made by experts and state leadership”, said Lester T. Sanders, President of Kentucky REALTORS®. “We stood ready to help Kentucky consumers successfully buy and sell property so the American dream of homeownership and wealth-building could continue. A housing market rebound means a better economic impact and outlook for all Kentuckians”, he said.
Distressed sales (foreclosures or short sales) were down 46% over June of 2019. It remains to be seen whether this figure will climb as forbearances and other programs expire as the year continues.
Home sales numbers were down as expected in May. 3,894 closings took place, down 23% from the 5,051 homes sold in May of 2019. The best way to measure what the next month will look like, however, is to look at pending sales (homes under contract). Last year, that figure for May was 7,311. This May saw that indicator rise by over 16% to 8,511. This indicates that June could emerge much stronger.
The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose an astounding 44.3% to 99.6 in May, chronicling the highest month-over-month gain in the index since NAR started this series in January 2001. Year-over-year, contract signings fell 5.1%. An index of 100 is equal to the level of contract activity in 2001.
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” said Lawrence Yun, NAR’s chief economist. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.
The average sale price of homes in Kentucky continues to rise. It climbed 4% to $215,187 (up from $207,000 in April 2019). Sales volume did take a hit, dipping 20%. to $837.9 million. However, the surging home prices due to the current lack of inventory is keeping the volume numbers impressively ahead of last year’s numbers. Even with the sale slowdown of the past 2 months, the year-to-date sales volume is 2.5% ahead of 2019 at $3.8 billion.
“KYR’s May Opinion Survey showed that 59% of Kentucky REALTORS® saw buyers returning to the market last month”, said Lester T. Sanders, President of Kentucky REALTORS®. “Currently, consumers don’t have enough options on the market. It’s a great time for homeowners who have considered selling to list their homes”, he said. “Multiple offer situations are becoming the rule rather than the exception.”
Strikingly, distressed sales (foreclosures or short sales) were down a remarkable 65% over May of 2019. This suggests that homeowner protection programs such as mortgage forbearances or loans are accomplishing what they were intended to do.
Hello Kentucky REALTOR® FAMILY.
I greet you as family, friend, and as President of Kentucky REALTORS®. These are the most difficult of times, and this is a difficult letter to write.
We have witnessed with our own eyes a black man (any man) dying from asphyxiation at the hands of those chosen to protect and serve. His name is George Floyd. Here in our Commonwealth, we are outraged at hearing of a young black woman named Breonna Taylor, a first responder, shot in her home by a police officer’s gunfire. These are outrageous acts. They occurred while we are in the midst of a pandemic. People are already stressed and emotions are running over the top. This combined with mistrust and anger is the perfect formula for devastation.
What we have seen across our state and nation are peaceful protests against racial injustice. In other cases, we saw riots that hurt people and destroyed property. Unfortunately, this is history repeating itself based on injustice, police brutality, and unresolved racial issues. To not speak out on these issues could simply mean we are complicit.
As champions of fair housing and inclusion, both the National Association of REALTORS® and Kentucky REALTORS® recognize and accept our responsibility to support policies that address racial injustice. We have reached out to National Association of Real Estate Brokers to join affiliated groups in conversations affecting the real estate business.
I recently announced a KYR Task Force on Diversity and Inclusion. This group will make recommendations, suggest policy changes, and devise strategies to help build a more inclusive organization. KYR will then be a resource to encourage and help local associations in developing their own Diversity Committees. KYR has already scheduled an interactive Cultural and Diversity session as we move into our Strategic Planning.
The Presidential Advisory Group, after in-depth discussion, has planned “A Conversation on Race” for our entire membership. This Virtual Town Hall will take place on Thursday, June 4th at 2:00 pm ET. The panel will include REALTORS®, Brokers, and Cultural Experts.
We are Champions for Home Ownership and we believe in the Protection of Private Property Rights. Kentucky REALTORS® NEVER condones violence of any kind against anyone or their property. “Injustice anywhere is a threat to justice everywhere.” As REALTOR® leaders we must be the calming voice in the midst of this storm (both physically and on social media). I welcome and invite the thoughts, comments, and suggestions of you, our members, as we work together for positive change. Our job is to respect our differences and “Lift as we climb.“ Yes, our families, communities, and each other. Why?
Because That's who We R!
Lester T. Sanders, KYR President
The effect of COVID-19 on the housing market in Kentucky was finally seen in the April statistics as a 12.5% drop in homes sold. 3,748 closings took place in April, down from 4,281 in April 2019. Housing market experts have been predicting a nationwide dip in sales for 2020 of about ten percent.
Nationwide existing-home sales dropped 17.8% from March to a seasonally adjusted annual rate of 4.33 million in April. Overall, sales decreased year-over-year, down 17.2% from a year ago (5.23 million in April 2019). April’s decline in existing-home sales is the largest month-over-month drop since July 2010 (-22.5%).
“The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales,” said Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices. Record-low mortgage rates are likely to remain in place for the rest of the year and will be the key factor driving housing demand as state economies steadily reopen,” Yun said. “Still, more listings and increased home construction will be needed to tame price growth.”
As expected, the market slowdown in Kentucky did not decrease sale prices. The average sale price of homes in Kentucky surged 8.4% to $212,361 (up from $195,994 in April 2019). Notably, sales volume was only down only 5.1%. April 2019 saw sales volume reach $839 million while April 2020 dipped to about $796 million.
“Buyers have not relaxed much during the pandemic shutdowns and the demand remains”, said Lester T. Sanders, President of Kentucky REALTORS®. “Some sellers have been cautious and waited to list homes. But, creative strategies, such as distancing, sanitizing, and virtual showings have allowed Kentuckians to keep homes on the market and still get top dollar.”
The number of homes available on the market continued its fall. The inventory level fell again to 3.28 months, down from 3.48 months in April 2019, a decline of about 6%. It continues to remain well below the ideal level of a 6-month supply.
The Kentucky housing market continued its strong start despite March being the beginning of the “COVID-19 season”. March home sales were up 3.6% over last year cresting at 4,194 (up from 4,048). Sales volume in March continued to climb, reaching $884.7 million. This bested the March 2019 figure of $773.9 million by nearly 15%.
Nationwide existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 8.5% from February to a seasonally adjusted annual rate of 5.27 million in March. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019).
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Any slowdown Kentucky may experience in the housing market most likely won’t affect prices. The March figures show that the rising median prices are still on their upward trajectory. The median sale price (month-over-month) in Kentucky rose once again in March. It was up almost 10% at $179,500, up from $164,000 just one year ago. The March year-to-date median price is $172,191.
Sales volume was up significantly for the third month in a row. It swelled 14% in March reaching $884.7 million. This was up from $773.9 million in March of 2019.
“REALTORS® have adapted quickly to a changing marketplace over the last few weeks”, said Lester T. Sanders, President of Kentucky REALTORS®. “Virtual showings, procedural changes, and following CDC, state and local guidelines for safety have helped clients continue buying and selling their homes. REALTOR® best practices have softened the impact that a fearful reaction to the pandemic might have had on the housing market in Kentucky.”
The number of homes available on the market is dwindling ever further. That inventory figure continues to flirt with the sub-three-month mark. The March 2020 level of 3.1 months of inventory (down 14% over March 2019) remains well below the ideal level of a 6-month supply.
Home sales continued their strong showing in the early months of the new year. Closings were up about 9% at 3,384, up from 3,108 in February of 2019. Rising median prices meant larger transactions, though, and sales volume had an even more notable rise. Sales volume in February reached $667.5 million. This bested last year’s figure of $579.7 million by just over 15%.
Nationally, total existing-home sales completed transactions that include single-family homes, townhomes, condominiums, and co-ops, rose 6.5% from January to a seasonally adjusted annual rate of 5.77 million in February. Additionally, for the eighth straight month, overall sales greatly increased year-over-year, up 7.2% from a year ago (5.38 million in February 2019).
“February’s sales of over 5 million homes were the strongest since February 2007,” said Lawrence Yun, NAR’s chief economist. “I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.” Yun noted that February’s home sales were encouraging but not reflective of the current turmoil in the stock market or the significant hit the economy is expected to take because of the coronavirus and corresponding social quarantines. “These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.
The median sale price (month-over-month) in Kentucky for February was up 5.1% for the second consecutive month, reaching $168,000. In 2019, that mark was 159,900. The February year-to-date median price is $167.517.
Sales volume was up over 15% in February. This figure reached $667.5 million, compared to about $580 million in February of 2019. Lester T. Sanders, President of Kentucky REALTORS®, says that the effect of the coronavirus on the Kentucky market won’t show in housing statistics for a month or two. “A strong February and March will likely give way to fewer sales as the true effect of this global pandemic weighs on the Kentucky housing market. For now, the market remains busy,” he said. “REALTORS® will continue balancing the need and desire of their clients to buy and sell property and our efforts to keeping them safe.”
Homes available for sale remain under well below the ideal level of a 6-month supply. The February figure of 3.8 months of inventory is down 19% from last year’s figure of 4.7 months.
HousingIQ Survey of Kentucky REALTORS® finds home sellers take wait-and-see approach as buyers are growing discouraged by the recent stock market correction.
Nearly two out of three REALTORS® -- 65% -- said their buyers were significantly discouraged by the recent stock market correction, according to the March 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. 84% of the over 700 REALTORS® polled from across Kentucky reported that their sellers had not removed their homes from the market due to coronavirus fears.
The HousingIQ Survey of Kentucky REALTORS® is administered monthly to the Kentucky REALTORS® membership as part of an effort to harness the ears-to-the-ground knowledge of REALTORS®. The responses are analyzed and reported as the HousingIQ/Kentucky REALTORS® Confidence Index. The March 2020 edition included additional questions to gather first-hand knowledge about the impact of the coronavirus on the Kentucky housing market.
The emerging trend is that there will be a shift to a buyer’s market and there will be more opportunities for single-family rental investors. In the next twelve months,
- 68% of respondents expect more houses to sell below asking price
- 60% of respondents expect houses to stay on the market for longer
- 69% of respondents expect the number of distressed sales to increase
- 55% of respondents expect increased sales to investors
Kentucky REALTORS® Communications Director Paul Del Rio says the Coronavirus’ true impact on the housing market will reveal itself in the next few months. “We anticipated a decline in activity as consumers begin to adjust to our current situation”, he said. “However, the housing market should remain strong and those who tough it out will take advantage of some great deals. We encourage Kentuckians to remember that REALTORS® are transaction troubleshooting experts and can help guide consumers through the home buying or selling process.”
The full report is available at https://housingiq.wainstreet.com/surveys/ky
Known for giving back to the communities in which they work and live, REALTORS® care about their neighbors. One tool that REALTORS® have made sure is available to them in times of need is the REALTORS® Relief Fund. This charitable program can be activated to direct monies to those affected by natural and other disasters.
After floodwaters receded and it was clear that Kentuckians were enduring a hardship, Kentucky REALTORS® (KYR) and the Lexington-Bluegrass Association of Realtors® each contributed $10,000 to this cause. A matching grant of $20,000 by the National Association of REALTORS® Realtor® Relief Fund now brings the assistance available to residents of Kentucky who were recently affected or displaced by the flooding to $40,000.
Ten counties in the Commonwealth are considered disaster areas due to the February 2020 flooding. Property owners, homeowners, and renters in Bell, Clay, Harlan, Knox, Lawrence, Leslie, Letcher, McCreary, Perry and Whitley counties were affected by the heavy rains. Related damage, such as mudslides and a train derailment, accompanied the traditional damage done by rising water.
Any affected residents can fill out an application for assistance from the REALTORS® Relief Foundation and will be considered on a first-come, first-served basis. In order to ensure that the maximum number of Kentuckians receive aid, the maximum amount available per application is $1000. Those interested in applying should visit the Kentucky REALTORS® website at kyrealtors.com/flood for more details and to download an application.
KYR President Lester Sanders said that a priority of this program is to make the funds available immediately. “When major disaster strikes, the REALTORS® Relief Foundation has one goal: help families who have endured unimaginable loss”, he said. “It’s our hope that these funds make what is bound to be a very difficult time in the lives of our neighbors a bit more bearable.”
Those interested in supporting the fund to help others in times of need may do so by making a private donation. The REALTORS® Relief Foundation welcomes contributions not only in times of disaster but at any time throughout the year. Additionally, 100% of all funds collected go to disaster relief causes. Visit kyrealtors.com/flood to find out how you can help.
Doctors say that, for most Americans, the seasonal flu poses a greater danger than the coronavirus, also known as COVID-19. Still, with many members traveling to both National Association of REALTORS® and KYR meetings and gatherings in the coming months, KYR leadership has been closely monitoring news on the disease and staying abreast of recommendations from the U.S. Centers for Disease Control and Prevention (CDC).
NAR has recently published guidance for REALTORS® to keep in mind as they conduct business on a daily basis.
What unique issues does coronavirus present to the real estate industry?
When an infectious disease, such as coronavirus, is associated with a specific population or nationality, fear and anxiety may lead to social stigma and potential discrimination. REALTORS® must be mindful of their obligations under the Fair Housing Act, and be sure not to discriminate against any particular segment of the population. While the coronavirus outbreak began in Wuhan, China, that does not provide a basis for treating Chinese persons or persons of Asian descent differently.
May I ask clients or others I interact with in my real estate business if they have traveled recently, or have any signs of respiratory illness?
Yes, you may ask clients or others about their recent travel, particularly to areas identified as having an increased risk of coronavirus. To avoid potential fair housing issues, be sure to ask all clients the same screening questions based on current, factual information from public health authorities.
I typically drive my clients to showings. May I refuse to drive potential clients to see homes?
Yes. However, be sure that any change to your business practices is applied equally to all clients. You may refuse to drive clients who show signs of illness or reveal recent travel to areas of increased risk of coronavirus, or you may instead decide to stop driving clients in your car altogether, and simply arrange to meet clients at a property. If you do continue to drive clients in your car, it is a good idea to frequently clean and disinfect surfaces like door handles and seat belt latches, and to ask clients to use hand sanitizer when getting in and out of the car.
Should I still conduct open houses on my listed properties?
Speak openly and honestly with your seller about the pros and cons of holding an open house. Assess the risk based on your specific location, and direct your clients to local and state health authorities for specific information about the severity of the risk in your area. You could also propose alternative marketing opportunities for your seller’s consideration, such as video tours and other methods to virtually tour a property. If you do hold an open house, consider requiring all visitors to disinfect their hands upon entering the home, and provide alcohol-based hand sanitizers at the entryway, as well as soap and disposable towels in bathrooms. If you decide to do any cleaning at your client’s home, be sure to check with your client in advance about any products you plan to use. After the open house, recommend that your client clean and disinfect their home, especially commonly touched areas like doorknobs and faucet handles.
What precautions should brokers consider taking in their offices?
Brokers should use their best judgment when formulating a plan. First, brokers should implement a mandatory “stay-home” policy for any staff member or agent exhibiting any sign of illness, and depending on where the broker is geographically located, a broker may want to consider imposing a mandatory remote work policy for employees and instructing agents to stay out of the office. In addition, taking measures such as holding virtual meetings or potentially postponing or canceling in-person meetings or events may be good measures to take to limit close contact between individuals. Be sure to monitor updates from the CDC, as well as your state and local health authorities for additional information and guidance on holding meetings or events.
Finally, do not panic, stay informed, and use your best judgment. The situation is rapidly changing, so focus on putting policies and procedures in place to keep your employees informed and safe, and to avoid business disruption in the event the situation worsens.
In addition, all members should take preventive actions to help prevent the spread of illnesses, including coronavirus and the seasonal flu:
· Stay home when you are sick.
· Wash your hands often with soap and water for at least 20 seconds. If soap and water aren't available, use an alcohol-based hand sanitizer.
· Avoid touching your eyes, nose, and mouth with unwashed hands.
· Avoid close contact with people who are sick.
· Cover your mouth and nose with a tissue when you cough or sneeze, or cough or sneeze into your sleeve.
· Clean and disinfect frequently touched objects and surfaces.
NAR is working on a plan to ensure continuity of business if conditions worsen. Several events, including the Association Executives Institute, scheduled for March 13-16 in San Diego, and Broker Summit, scheduled for March 31-April 1 in Los Angeles, will be affected by a non-essential travel suspension. Members who were registered or scheduled to attend those events or other meetings on behalf of NAR will be notified of the travel suspension.
KYR has not announced any changes to in-person meetings at this time. We will closely monitor CDC bulletins, NAR guidance and local situations that could affect any future events and will communicate any information via all channels. Please monitor social media feeds and the Cerkl newsletter for any news regarding this or other association business.
2020 is off to a great start with home sales jumping 18.5% over January of 2019. The closings figure reached a record high for the month at 3,153 homes sold, compared to 2,661 in January of 2019.
For the second straight month, overall nationwide sales substantially increased year-over-year, up 9.6% from a year ago (4.98 million in January 2019). Lawrence Yun, NAR’s chief economist, finds the outlook for 2020 home sales promising. “Existing-home sales are off to a strong start at 5.46 million.” Yun said. “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”
The median sale price (month-over-month) in Kentucky for January was up 5.1% at $167,000. In 2019, that figure reached 158,950. The median price has been steadily climbing as low-inventory figures in urban markets continues to act as a barrier to buyers making a move. Sellers continue to find the median sale price reaching 98% of the median listing price ($170,000) across the state.
January’s days-on-market (DOM) figure rose just under 5% over last year’s mark to 138 days. Another month-over-month increase comes as a relief to property owners who may have been waiting a bit longer to enter a pending status. With a shortage of homes entering the market, low inventory continues to affect affordability and buyer flexibility.
Sales volume was up significantly in January. A 21% increase in volume means total sales reached $11.15 million, compared to $9.9 million in January of 2019). Lester Sanders, President of Kentucky REALTORS®, says that rising prices are definitely impacting the economy. “With prices steadily climbing, the amount of dollars within the record number of transactions is noteworthy”, he said. “We continue to watch for any signs of a slowdown, but so far it looks like we could continue to see record-breaking statistics as we head into the warmer months.”
Homes available for sale remain under the ideal level of a 6-month supply. The January figure of 4.4 months of inventory is down 13% from last year’s figure of 5.1 months. This market condition is expected to persist through 2020.