For the first time in eight months, and breaking the streak of record low inventory levels in as many months, the number of homes on the market in June rose when compared to the previous month. The 1,591 homes on the market represented an 8% increase over the 1,468 homes in May. Despite the rise in inventory currently, June’s 2021 total was still 49% lower than the 3,110 homes available last year and is the 26th consecutive month of year-over-year declines. June was the fifth straight month of inventory levels being under the 2,000 mark.
Recent new listings may have helped with inventory as the number of homes that came to market saw an increase for the third straight month, rising 2% over last year, with 1,699 listings this year compared to 1,659 in 2020. June’s new listings are the highest monthly total since July of last year when 1,734 homes hit the market.
“Inventory is still a struggle for many buyers but we may get a point where market fatigue starts to creep in,” said Kristy Gooch, president of the Lexington-Bluegrass Association of Realtors® (Bluegrass REALTORS®). “Showings are starting to slow a bit and pending sales were lower than last year. If inventory does improve, prices may still appreciate but the rate of growth should level off.”
Showings in June were down year-over-year for every day in the month and ended June down 3%, from 24,181 last year to 23,567 in 2021.
June’s pending sales fell for the second month in a row, dropping 15% to 1,450 homes under contract compared to 1,703 last June.
This data may signal slower months ahead, however, in June, sales and prices hit new highs.
Home sales for the month were the highest on record and the second most of all-time, with only July 2020 seeing more activity. Transactions in June were 1,504, a 7% increase over the 1,408 sold last year and 16% higher than the previous month. Single-family homes increased 7% with 1,407 sales while townhouse/condo sales rose 8%, with 97 sales, making up 15% of the total market for the month.
Total sales through June were up 10% from 2020, with 7,212 transactions closed in the first half of the year, compared to 6,564 during the same period last year.
New construction home sales plunged year-over-year for the third straight month, with June sales standing at 103, a decrease of 36% over the 162 sales in 2020.
Real estate prices soared to another all-time high, following the previous month’s record. June’s median prices marked the fourth straight month of record prices and hit $234,500 for the month, an increase of 17% over last year’s $200,000 and up 3% from the previous record last month of $227,750.
In fact, the median price in Fayette County jumped 19% year-over-year to $280,000 while Woodford County’s median price jumped to $305,000, an increase of 45% over last year.
June marked the 12th consecutive month of double-digit price increases and the 28th straight month of year-over-year appreciation. Single-family homes increased 15% to $235,000 while townhouse/condo prices jumped 21% to $200,000.
Year-to-date, median prices for all residential sales stood at $217,500 compared to $190,000 in 2020, an increase of 15%.
Total dollar volume of home transactions jumped 23% in June to an all-time high, with just under $400 million for the month, compared to just over $325 million last year. For the year, total sales volume has reached just over $1.8 billion, a 26% increase over 2020.
Lawrence Yun, chief economist for the National Association of Realtors®, said that at a broad level, home prices are in no danger of a decline due to tight inventory conditions, but does expect prices (on the national level) to appreciate at a slower pace by the end of the year.
“I agree with the national prediction,” said Gooch. “Local demand is still very strong which will keep prices elevated but double-digit appreciation shouldn’t be around much longer. We may start to experience a plateau in the late summer, early fall months since the market finally took a deep breath and began to relax.”
But through the first half of the year, days on market was still extremely low at 27 compared to 52 last year, a decrease of 48%. For June, days on market matched the all-time low at 19 days, a 62% decline from 50 days in 2020.
And with sales through June remaining at record levels, the months of inventory for the month remained near record lows at 1.1 months for the third consecutive month. Last year, housing supply hovered around 1.6 months, 31% higher than today. A balanced market is generally defined as six months of housing supply.
“It’s hard to beat the cost of money right now in the mortgage market,” stated Gooch. “Reports just showed the cost of a 15-year mortgage just hit record lows and rates on 30-year loans dropped again recently to below 3%. Buyers are certainly motivated by the low rates and demand for housing will stay high in Central and South Eastern Kentucky as long as loans are cheap and supply is short.”
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