Housing inventory in the region has been increasing in recent months, even before the current rise in interest rates. The number of homes on the market rose 8% in May to 2,346, up from 2,158 homes last year. Unsold inventory rose to 1.5 months in May, a 7% increase over last year when it was 1.4 months but even with the previous month.
Despite the uptick in inventory, homes are still selling faster than last year. Properties remained on the market for 21 days in May, down from 28 days in 2021 and 25 days in April.
“Even with more homes coming online, the demand is high in this area and inventory still isn’t fully meeting that need,” said Rusty Underwood, president of the Lexington-Bluegrass Association of Realtors®. “Inflation along with the rise in interest rates is certainly holding some buyers on the sidelines but prices are still elevated with no evident signs of cooling.”
Real estate sales fell 2% in May, reaching 1,462 residential transactions compared to 1,488 last year. May’s figure was the second most on record for the month with last year’s total being the record high.
Single-family home sales rose about 1% while townhouse/condo sales dropped 30% for the month. Townhouses/condos made up just under 6% of the total market in May.
Fayette County saw a 6% decrease in May sales with Madison, Jessamine, Pulaski, Montgomery and Woodford also experiencing a sales decline. The largest growth counties by activity were Scott, Franklin, Clark, Laurel, Anderson and Bourbon counties.
“We are seeing sales level off as we reach the half way point of the year but the previous two years were highly unusual for real estate,” stated Underwood. “They were the highest on record for sales and broke every record in most major categories tracked by Bluegrass REALTORS®. Real estate appears to be returning to the pre-pandemic levels of 2019, minus the increase in mortgage rates.”
Even with external factors hampering market activity, median prices were still on the rise in May. Prices jumped to new all-time highs in May reaching $248,000, up 10% over last year when the median was $225,000, and clipping last month’s previous record of $245,000. Single-family home prices increased 11% to $250,000 while townhouse/condo prices jumped 8%, reaching $212,750.
Of the top 10 most active counties in Bluegrass REALTORS®’s 30-county region, seven saw double-digit price growth for the month. Jessamine closed with the highest median price at $348,900 with Fayette at $294,500 and Woodford at $290,000. The highest percent change in the 10 most active counties were Jessamine and Franklin at 34% and 30% respectively.
May’s total volume jumped to almost $430 million in residential real estate sold, the highest on record, due to a new high in median price and a healthy sales total. This represents an 10% increase when compared to last year’s total of over $390 million and a jump of 6% over the previous record in April (just over $404 million).
“Sales will almost certainly remain a little behind what we have experienced over the past two years,” continued Underwood. “The same factors that helped push the market forward – marginal inflation and historically low rates – are the same things, in reverse, that are cooling the market.”
Pending sales slowed 5% in May, with 1,568 homes under contract, compared to 1,654 last year.
New real estate listings in Central and Southern Kentucky were down only 1% compared to a year ago, with 1,917 residential properties versus 1,926 last year, but up 6% when compared to the 1,808 new listings from April.
The uptick in listings could be a result of a surge in interest rates causing a slowdown in showing activity. May saw an 11% decline in buyer appointments to view homes, with 22,262 this year compared to 24,958 last year. And interest rates jumped to an average of 5.23% in May, the highest level in 13 years when the average hit 5.42% in June 2009.
“With interest rates up, and indications that another round of rate hikes are possible, and locally, prices still rising, many sellers feel now is the time to list their home before a number of buyers get pushed out of the market. However, home buyers that do continue their search may see more options going forward as contract signings across the country are down and inventory gets a bump in the coming months.”
As the region’s leading advocate for homeownership, Lexington-Bluegrass Association of Realtors® (Bluegrass REALTORS®) understands the value and joy of owning a home. Bluegrass REALTORS® represents more than 4,000 Realtors® located in 30 counties: Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Estill, Fayette, Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Lee, Madison, McCreary, Menifee, Montgomery, Nicholas, Owsley, Powell, Pulaski, Rowan, Russell, Scott, Wayne, Whitley and Woodford counties. Visit www.lbar.com for up to the minute real estate listings and buying and selling resources.