LEXINGTON, Ky. – Home sales rose in July for only the second time this year, reaching 5,072 transactions, a 1.4 percent increase over the 5,000 sold in July 2017. For the year, home sales are trailing 2017 by almost two percent, with 30,354 transactions through the first seven months of the year. In the same period during 2017 there were 30,950 sales recorded.
Nationally, home sales have fallen for five straight months, decreasing less than one percent from June 2018 to July 2018, but are 1.5 percent below a year ago. The forecast from Lawrence Yun, NAR chief economist, is that home sales may decrease one percent for 2018 and then rise 2 percent in 2019. Across the state, total home sales may end lower than in 2017, however, this year should stand as the second highest on record.
“The market has been hard to predict in 2018,” said Steve Cline, president of Kentucky Realtors. “We are seeing ups and downs in overall sales and the trends aren’t following the national patterns. The dynamics at play are low inventory and mortgage rates, coupled with a strong economy and high housing demand, making it tough to gauge what will happen from month to month.”
Home prices in Kentucky fell in July by 4.8 percent to a median of $133,814, down from $140,514 in 2017. This was the first year-over-year price drop since May 2017. Nationally, median home prices were up 4.5 percent to $269,600, which is double the state’s median price.
Kentucky’s housing inventory slipped in July year-over-year after seeing the first annual increase last month. The 3.82 months of supply in July was down 2.1 percent versus July 2017, but was more than the 3.47 months of supply available in June. For the year, inventory is down 2.6 percent versus the same period in 2017, showing 4.14 months over the first seven months of the year. Nationally, housing inventory remained at a 4.3-month supply.
“Properties priced correctly are being scooped up fast,” said Cline. “The market is still hot in most areas of the state, making it difficult for would-be buyers to move on a house before it’s gone.”
In fact, July saw a 15.9 percent decline in the amount of time properties stayed on the market. At 95 days, this is the first month on record that homes have averaged fewer than 100 days on the market in Kentucky. Nationally, properties typically stayed on the market for 27 days in July, a 10 percent drop from a year prior. Across the country, 55 percent of homes were on the market for less than one month.
“Because Kentucky has a low cost of ownership, many people are looking to purchase instead of rent,” continued Cline. “With a lower than usual supply of homes on the market, demand has been pushed higher and in July, it seems lower priced homes outside the metro areas made up the bulk of transactions as an overall price decline was reflected across the state.”
Median prices were up in the three largest areas of the state – Louisville, Lexington and Northern Kentucky.
Looking forward, Yun has said that rising inventory levels, if new home construction can finally start picking up, would help slow price appreciation, help aspiring first-time buyers and be good for the long-term health of the nation’s housing market.
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.
To view housing statistics for the state, as reported to Kentucky REALTORS®, visit housingstats.kyrealtors.com.