Housing report

Lexington housing report: Inventory shortages continue even as home sales rise

LEXINGTON, Ky. (WTVQ/LBAR) – Home sales in the central Kentucky area rose in August, marking three consecutive months of positive sales gains, according to data from the Lexington-Bluegrass Association of REALTORS®.

The monthly total was the second highest on record, reaching 1,460 sales, up 5% from last year’s total of 1,389 (August 2020 stats).

Transactions exceeded last year’s total in the first eight months of the year. With the increase in August, sales through 2020 are up 3%, with 9,762 sales compared to 9,509 at the same time last year.

New construction continued to grow with 123 sales in August, up 14% from 108 sales last year. The monthly total is the sixth consecutive month with year-over-year increases, with new construction sales rising year-over-year in 13 of the past 14 months.

August pending sales rose double digits for the month, up 10% from a year ago when pending transactions reached 1,427. August’s 1,568 pending sales were the highest ever recorded for the month and is the fourth consecutive month of year-over-year records.

“Homes that come on the market are usually under contract extremely quickly,” said Greg Buchanan, president of the Lexington-Bluegrass Association of REALTORS®. “There simply isn’t enough supply to meet the demand that the region has been experiencing for several years. Buyers actively looking for homes are moving quickly, reducing available inventory at all levels. »

New listings in August were down 13% from a year ago, with just 1,620 uploads compared to 1,853 in 2019.

August inventory hit a historic low, with only 1,993 homes available, early levels fell below 2,000 in a month. That’s a 50% drop from a year ago, when inventory levels were 4,018 homes and 6% below July’s level, which was the previous record high.

August is the ninth consecutive month, starting in December, of record lows. February was the first month housing stock fell below 3,000 with monthly declines since then.

Inventory months hit all-time lows in August, hitting 1.4 months, down from 2.9 months last year, a 52% drop and the second-lowest total on record. Homes priced at $140,000 to $250,000 hovered around two to three weeks of available inventory in LBAR’s 26 counties.

In Fayette, Madison, Scott and Jessamine counties, the four busiest counties in the jurisdiction, inventory levels were, in some cases, weeks away for homes priced below $250,000.

A six-month supply of inventory is often considered a balanced market, showing how tight inventory has become in many central Kentucky counties.

Fayette County is specifically struggling with housing inventory, with homes under $250,000 sitting on two weeks or less of homes available for sale and virtually no inventory for homes priced between $140,000 and $160,000.

The inventory crisis has also affected days on the market, with August seeing a 14% year-on-year decline, with homes taking an average of 38 days to sell, compared to 44 days in August. last year. Seventy-two percent of homes were on the market for less than a month while only 10% lasted longer than 120 days.

“Prices are constantly pushed higher due to lack of inventory, Buchanan said. “Almost every county in our jurisdiction is struggling to find enough housing for the demand we are experiencing. Sellers who need to list their property find this is the perfect time to be on the market. »

The median home price in August reached $205,000, a 12% increase from a year ago, when the median was $182,500. House prices have risen for 18 consecutive months due to increased demand. August marks the third month in a row with median prices closing above the $200,000 level.

Year-to-date, the median price for all residential properties is $194,500, compared to $176,000 last year, a change of 11%.

Total real estate sales volume rose 21% year-over-year to just over $350 million in August from just over $290 million last year. For the year, total real estate sales volume closed at $2.2 billion, an 11% increase from the $2 billion that closed in 2019.

Pedestrian traffic to homes continues to grow, increasing by 13% in August, with 22,577 appointments against 20,053 last year. August’s total slowed slightly from the previous month after hitting three consecutive record months starting in May.

Buchanan continued, “Buyers are in the pipeline, ready to go with mortgage rates at historic lows and many improving economic indicators. This area needs listings so moving buyers can purchase their next home and first-time buyers can enter the market with a strong selection of inventory.

Freddie Mac reported the lowest monthly rate on record for August as the 30-year rate hit 2.94, the first time a monthly rate was posted below 3%. Freddie Mac, along with other industry experts, including the National Association of REALTORS® Chief Economist, predict rates will hover at 3% or lower for the rest of the year.

LBAR represents over 3,500 real estate agents located in 26 counties: Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Estill, Fayette, Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Lee, Madison, Menifee, Montgomery , Nicholas, Owsley, Powell, Rowan, Scott, Whitley and Woodford Counties.