Kentucky real estate market reaches tipping point
Published 8:00 am Friday, June 24, 2022
As the economy continues to falter, a recent survey of Kentucky Realtors found many expect the uncertainty to impact the state’s housing market.
Earlier this week, the Kentucky Association of Realtors released the most recent HousingIQ survey results. The findings included 77% of real estate professionals anticipate property owners needing more time to find a buyer over the next 12 months. That’s 50 points higher than a year ago.
Overall, the Kentucky Realtors confidence index is at 33.3 for May. For perspective, a score of 100 would indicate all respondents believe market conditions will improve over the next 12 months.
The score marked the third consecutive decline in as many months and is the lowest since April 2020. The confidence index was at 49 in April.
The data shows the real estate market has reached “a tipping point,” survey author Vidur Dhanda said in a statement.
While there are signs of a buyers’ market, Dhanda pointed out that half of the agents who responded said they’ve had clients back away due to fears over rising mortgage rates.
“Sellers are trying to get in front of the market slowdown with 61% of the respondents expecting increased price cutting by sellers,” Dhanda said. “However, that might not be enough for some buyers.”
The homeowner stress index continues to hover around the 70 mark, as it has since the pandemic began. In addition, the survey has found as the confidence index began falling earlier this year, the buying power index began rising substantially. It’s now at 75.7 after being at 51.4 in February.
That likely means more opportunities for investors in the housing market. According to Dhanda, 38% of respondents said they’ve seen more investor activity in the last three months.
“As buyers get priced out, investors will strategically add to their portfolios as long as the rental market stays strong,” Dhanda said.
The survey is based on 210 responses from Kentucky Realtors, representing 26% of the member brokers. Those responses came between May 27 and June 8, and the survey results have a 5% margin of error with a 95% confidence level.
Of Kentucky’s nine metro area housing markets, seven are currently listed as underperforming. The strongest metro market in the state is the Clarksville, Tenn. area, which includes Christian and Trigg counties in southwestern Kentucky. That market ranks 45th out of 402 metro areas, according to HousingIQ.