The number of new listings that hit the market in February was the highest since 2020. The 1,268 properties in the Central and Southern Kentucky region represented an 8% increase over the 1,170 last year and was 20% higher than the previous month’s total of 1,053 homes. This is positive news for buyers as the spring market emerges, which has long been considered the peak buying period for real estate.
Housing inventory continued to increase year-over-year with 2,646 homes on the market in February compared to 2,524 last year, a 5% annual jump. Inventory levels, however, decreased from the previous month by 7% as they reached 2,839 available properties.
"More housing supply going into the warmer months will help satisfy demand in the region," said Randy Newsome, president of Bluegrass Realtors®. “Buyer frustration can set in when housing choices are limited, so any uptick in inventory is good for the market.”
Home sales dropped in February with 780 total residential sales this year, down 7% against last year’s 839 sales. Compared to the previous month, sales fared better and were up 8% from 723. Single-family home sales stood at 711, marking a 10% drop over the 786 sold in 2023. Townhouse/condo sales increased by 30% to 69, the third consecutive month with year-over-year gains, up from 53 in 2023.
New construction sales continued their upward trend with a 5% increase in February, rounding out four consecutive strong months. February ended with 92 sales compared to 88 last year.
With sales remaining slower and inventory moving forward, months of inventory (MOI) remained above 3 for the fourth consecutive month. The 3.4 months was the highest February total since 2019. This represented a 13% increase from a year ago when it was 3 months but was down 13% from the previous month of 3.9 months.
February’s days on market (DOM) jumped to the highest level seen in three and half years, averaging 48 days, up 2% from last year’s 47 days. Properties stayed on the market an average of 10 days longer from last year, up 26% from 38 days. The median DOM remained even year-over-year, at 23 days.
"Sales haven’t rebounded from the rise in interest rates that happened two years ago although inventory has jumped recently,” Newsome emphasized. “The good news is the Fed is still indicating they plan several rate cuts in 2024 which would give the market a much-needed boost by giving consumers more buying power.”
Interest rates in February averaged 6.78%, up slightly from 6.64% the previous month and 6.26% the previous year.
Despite rates not moving lower as quickly as previously thought, median home prices continued to rise with February tallying the 60th consecutive month of year-over-year price appreciation. Prices rose to $265,000 in February compared to $235,000 in 2023, a jump of 13%. The median reached an all-time high for the month and tallied the second highest median on record.
Single-family homes landed at $267,500 in February, an 11% jump, while townhomes/condos rose 13%, moving up to $235,000.
The total volume of residential real estate sold in February was elevated with the jump in median price, increasing 9% to just over $241 million, up from $222 million last year. The monthly total was the second highest February on record behind only 2022.
Newsome concluded, "Buyers have become more accepting of rates being higher than they were during the pandemic and may come back into the market. If rates do drop significantly, buyers can refinance to lower payments while retaining any equity they have gained. And, getting into the market now may avoid the increase in competition from other buyers that may come from lower rates when that occurs."
Pending sales in February dropped only a percent from last year, hitting 1,041 homes under contract from 1,051 in 2023, but rose 15% from the prior month when contracted homes stood at 903.
As the region’s leading advocate for homeownership, Bluegrass Realtors® understands the value and joy of owning a home. The Association 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.bluegrassrealtors.com for up to the minute real estate listings and buying and selling resources.