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Real estate: 2021 begins with high demand and higher prices

LEXINGTON, Ky. – Last January, the market was off to a great start with home sales topping out 19% higher than January of 2019. One year (and a pandemic) later, the Kentucky housing market has duplicated that feat. January 2021 home sales were up 19% once again, reaching 3,512.  

Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.6% from December to a seasonally adjusted annual rate of 6.69 million in January. Sales in total climbed year-over-year, up 23.7% from a year ago (5.41 million in January 2020).

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” said Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.” 

The median sale price of homes in Kentucky for January rose almost 14% percent from last year’s mark to $190,000. The statewide average home price jumped 17% over last December surging to $230,245. The big story continues to be sales volume. An already booming market had home prices up about 18% year-over-year in January of 2020. After six months of a scorching hot post-pandemic affected market, which saw inventory plummet to record lows, January 2021 saw sales volume surge another 31% to $808.6 billion. This is up from $511 billion just 2 years ago. 

2021 began with record low inventory levels. Economists declare that a healthy housing market contains 6 months of inventory. January saw that figure hover at just below 2 months. “With low inventory and the speed with which homes are being sold, it is more important than ever to partner with your local realtor,” said Charles Hinckley, President of Kentucky Realtors. “They possess local market knowledge and can help Kentuckians achieve their real estate goals.”

The market is showing signs of slowing down as pending sales were down for the first time since April. This is most likely due to a combination of decreased foot traffic due to cold weather, and a simple lack of properties to consider. Pending sales for January 2021 were 3,212 which was down 4.5% from 3,365 in January of 2020.

“Realtors are partnering with sellers to give their homes the best position in the market,” said Hinckley. “This is important, especially for those who are relocating.” 

Just 11 units sold as distressed, which is down 85% from January of 2020. More property owners are remaining in their homes due to government programs continuing to assist those with hardships.

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