COVID-19 Effects on Kentucky Housing Market Not as Dire as Expected
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.