Total Kentucky home sales rose by 10% in May says the Lexington-Bluegrass Association of Realtors. During the fifth month, the real estate market reached 1,412 total transactions, versus 1,281 during the same period last year. This marks the highest monthly total since June 2017 and the fourth straight month for year-over-year increases.
According to a press release from the association, single-family homes were up 9% from last year, with condos/townhomes sales jumping 25%. Total home sales this year are up six percent, reaching 5,260 total transactions, compared to 4,975 the same time last year.
Nationally, home prices were up 3.6% in April, reaching $267,300. Interest rates, however, have been historically low, according to Al Blevins, president of LBAR.
"With an increase in jobs, millennials are able to afford homes. The younger age groups are becoming first-time home buyers, and a lot of seniors are downsizing to smaller homes," Blevins said.
Additionally, the increase in real estate sales indicates the market's ongoing recovery from the recession over a decade prior.
"Back when we had the financial disaster in 2008, the bottom of the real estate market just fell out," said Donna Gregory, broker associate with Century 21 Real Estate. "This year is the first time the market has really bounced back."
LBAR reported Laurel County real estate sales in April to be $6.9 million, with the year's cumulative sales as $21.3 million. That was up from 2018's $4.7 million in April and $15.6 cumulatively at that point.
Comparatively, in April Whitley County garnered $2.8 million, with Knox taking in $1.2 million. Whitley earned $2.3 million and Knox $365,000 in April last year. Conversely, Whitley's cumulative summary is reported as $8.2 million, topping last year's $5.9 million. Knox cumulatively was $4.7 million, which was more than the county's previous $3.1 million. Gregory accorded Laurel's higher sales to more real estate inventory in the area.
"Laurel County sales have steadily increased as well as the median home price, especially comparatively to other neighboring markets," said Daniel Carmack, realtor with Sallie Davidson Realtors. "Home prices are on the rise and so are home sales. The fact that interest rates have remained stable and have not skyrocketed have certainly helped this scenario, not to mention the terrific economy that Kentucky has been experiencing the last 3.5 years."
Carmack suspects that numerous business startups, small businesses and manufacturing jobs improved Kentucky's economy as a whole, including London, Corbin and surrounding counties. He added that the economy is now at a point where more people have the money to purchase a home. Gregory explained that the current nature of the real estate market has also shifted.
"Typically, real estate is a buyer's market, not a seller's marker. In 2019 we turned it into a seller's market, meaning we now have more buyers than sellers," she said. A buyer's market means inventory is plentiful enough that vendors must keep prices down. With a seller's market, multiple buyers are competing for the same product, enabling sellers to raise rates.
"In my particular sales, I've been seeing a lot of the elderly relocating and downsizing," continued Gregory. "I believe millennials are starting to become homeowners. And with younger people becoming realtors, they can target those younger customers because they come from the same demographic."
Carmack noted that, while more millennials are becoming homeowners, they are generally purchasing homes at a later age than previous generations.
"Sometimes we are seeing the age of a first-time buyer be 28-32 where it used to be mid-20s," he said. "We are also seeing different ethnicity move into Laurel County, which is a terrific thing on so many fronts."
For the oncoming years, Blevins sees the real estate market to continue its recovery.
"I see a lot of positives," he predicted. "Jobs are being made. Realtors are selling homes and moving property. It's encouraging. We have more cash deals being made and overall, I think the economy is pretty good. We just need more housing and more affordable housing."
Blevins said that Americans still believe in homeownership. He added that homeowners become prominent members of their community and that the children of homeowners overall perform better in school.
