Home sales dropped in July for the first time since the pandemic spread across the country last spring. Transactions saw an 8% decline year-over-year with 1,459 homes sold compared to 1,583 sales last year. Even with the slowdown, sales still reached the second highest level on record for July. Single-family homes decreased 8% with 1,364 sales while townhouse/condo sales rose 2%, with 95 sales, making up just 6.5% of the total market for the month.
Total sales through July remained up 6% from 2020, with 8,732 transactions closed in the first seven months of the year, compared to 8,223 during the same period last year.
New construction home sales slipped year-over-year for the fourth straight month, with July sales standing at 111, a decrease of 22% over the 142 sales in 2020. For the year, new homes have dropped 16% in total sales.
“Last year's spring market was delayed due to the pandemic,” said Kristy Gooch, president of the Lexington-Bluegrass Association of Realtors® (Bluegrass REALTORS®). “The pandemic pushed the strongest part of the selling season off several months because people were quarantined and uncertain. If we compare July this year to July 2019, we see sales were up considerably. I would expect to see similar results in the months ahead.”
Despite the lower sales, real estate prices remained near record highs, reaching $233,000 in July, a record for the month and the second highest all-time behind the June record of $234,500. The slight drop was 13% higher than last year but the softening broke four straight months of record prices and was the first month-over-month decline since January of this year.
In fact, the median price in Fayette County jumped 11% year-over-year to $261,000 while Woodford County’s median price jumped to $314,000, an increase of 21% over last year. Both Scott and Jessamine Counties had median prices higher than Fayette, coming in at $280,000 and $269,000.
June marked the 13th consecutive month of double-digit price increases and the 29th straight month of year-over-year appreciation. Single-family homes increased 12% to $235,000 while townhouse/condo prices jumped 28% to $200,000.
Year-to-date, median prices for all residential sales stood at $220,000 compared to $192,000 in 2020, an increase of 15%.
Total sales volume of home transactions exceeded $400 million in July, reaching an all-time high. This is a 6% increase over last year when the total was just under $380 million last year. For the year, the total sales volume has exceeded $2.2 billion, a 22% increase over 2020 when the total hit $1.8 billion.
“Home prices leveled off in July,” said Gooch. “Although they are still near record highs, inventory improvements, along with a softening in buyer demand, should gradually help slow the pace of appreciation going forward.”
New listings hitting the market saw an increase for the fourth straight month, rising 11% over last year, with 1,918 listings this year compared to 1,734 in 2020. June’s new listings are the highest monthly total since May 2019 when 1,958 homes hit the market. New properties listed were spurred by an increase of homes coming online in the Somerset/Lake Cumberland (SLC) region.
After rising for the first time in eight months in June, the number of homes available for sale rose 20% month-over-month. However, available homes were still down 35% year-over-year, with 1,907 homes on the market compared to 2,923 last year. Despite the rise in inventory, July’s 2021 total was the 27th consecutive month of year-over-year declines. June was the sixth straight month of inventory levels being under the 2,000 mark.
Increasing inventory levels helped push the months of inventory in July up to 1.3 months compared to 1.1 the previous month, an increase of 18%. Last year, housing supply hovered around 1.3 months, the same as seen in 2021. The last time year-over-year unsold inventory levels were equal or above was in June 2019. A balanced market is generally defined as six months of housing supply.
Showings in July grew from the previous month but were down year-over-year 2%, from 24,227 last year to 23,750 in 2021. Weekly showings started and ended July down year-over-year with a spike in the middle of the month.
“The uptick in new listings offers buyers some hope in trying to find a home and lock in mortgage rates that remain low. With sales still happening exceptionally quick in many cases, now is still a good time to sell and we may see even more new sellers in the coming weeks before inventory really starts to inch up as we finish out the year,” continued Gooch.
As a result of a buyer pause, July’s pending sales fell for the third month in a row, dropping 6% to 1,555 homes under contract compared to 1,661 last June. However, pending sales did jump 7% over the previous month.
Interest rates are still enticing as fixed mortgages have remained under 3% defying predictions that 2021 would bring higher rates. Recently, the 30-year rate dipped back to where it stood at the beginning of the year.
“As we move into the second half of the year, we should see more homes available,” said Gooch. “This would give buyers more opportunities to find a home, which might reduce some of the competition, but prices will remain strong. In addition, sellers wouldn’t be under as much pressure to find a replacement property when they listed their home.”
As the region’s leading advocate for homeownership, Bluegrass REALTORS® (Bluegrass REALTORS®) understands the value and joy of owning a home. Bluegrass REALTORS® represents more than 3,500 REALTORS® 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. Visit www.lbar.com for up to the minute real estate listings and buying and selling resources.