WKYT Investigates: Hot Housing Market
Home sales in Central Kentucky continue to rise.
LEXINGTON, Ky. (WKYT) - Home sales in Central Kentucky continue to rise. Builders say they’re having a hard time keeping up with the demand, and realtors say homes are selling faster, and for more money, than ever before.
“Most of the buyers now really still want the granite countertops. They loved the tiled backsplash. The LVP flooring which is luxury vinyl plank,” explains realtor Jason Scolf. “A lot of people are looking for that three-bed, two-and-a-half bath, 1700 to 2200 square foot home. We have a lot of competition there between the first-time homebuyers and the ones who want to downsize.”
Interest rates are low, competition is high, and sellers are making much more of a profit than they would have pre-pandemic.
“The median price of a new home being built in Fayette County is probably approaching $300,000 and that’s bad for our first-time homebuyers trying to get in there,” notes Todd Johson, the executive vice president of BIA, the Building Industry Association of Central Kentucky. “The market pre-pandemic was heating up because of the low-interest rates. In Fayette County for example though, even though the demand was getting hotter, we had been trending down in the number of homes we’ve been building. That’s basically because of the lack of availability of developed lots.”
To understand today’s housing market, we have to look at where we were when the pandemic started, and parts of our economy shut down.
“There was an expectation that housing demand would fall off, but with interest rates being really low, the stimulus checks probably contributed as well to this increase in demand. So rather than seeing demand fall off, demand stayed fairly strong,” says UK economist Michael Clark. “Because we don’t see as many houses out there for sale, and we still see this strong demand, that’s driven these prices up. Houses are selling much more quickly than we’ve seen in a long time.”
Even getting the supplies to the job site is difficult right now.
“Whether it’s lumber getting transported from the mills to distribution sites, or if it’s appliances coming from overseas being impacted by the container shortage, the shipping container shortage, and then once it gets to the states there’s just not enough trucks available to get the products distributed,” says Johnson. “I think we’re years away from meeting up the demand.”
“We’re three to five years from the inventory issue changing,” says Scolf. “Now, buyer sentiment may change which will influence this market. A lot of buyers are starting to sit on the fences, we’re not seeing as much of the crazy multiple offer situations. If that starts to slow, and houses start to sit a little bit longer, then sellers will have to back down a little bit, making it a better market for buyers.”
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