The real estate market in the Bluegrass region kicked off 2025 with rising home prices, strong sales figures and increased housing inventory.
Real estate prices rose to a new benchmark for the month of January, reaching $273,000. Compared to last year’s $258,000, the jump was 9% and reached the highest on record for the month. The January figure was also up 1% from the previous month. January marked the 71st consecutive month of year-over-year price appreciation. Single-family homes hit a median of $275,000, a 6% increase from the previous year’s $260,000, while townhomes/condos dropped 10% to $219,750 from last year’s $243,450.
The total volume of real estate sold in the first month of the year was just over $245 million, up 15% from 2024 when the total was $213 million.
“The data shows a strong start to the year with rising home prices and increased sales volume even as homes are taking longer to sell,” said Todd Hyatt, president of Bluegrass Realtors®. “The rise in inventory is a positive sign for buyers, offering more choices in the market, which is much needed now.”
Despite the bad weather, January 2025 saw strong sales activity with 784 homes sold, marking a 7% increase from last year’s total of 733. Single-family sales increased 8% with 730 sales this year compared to 677 last year. Townhouse/condo sales dipped slightly to 54 sales compared to 56 in 2024, a 4% decrease.
New construction sales in January rose year-over-year by 4% with 83 sales in 2025 compared to 80 in 2024. From the previous month, new construction sales slid from 91, a decrease of 9%.
“January’s colder temperatures and unpredictable weather may have contributed to the slight dip in pending sales and longer days on market,” stated Hyatt. “However, the strong increase in total sold volume and rising home prices indicate that demand remains steady regardless of seasonal challenges.”
Pending sales dipped slightly, year-over-year, with 897 properties under contract in January compared to 912 in 2024, a drop of 2%. From the previous month, however, homes under contract rose 9% from 824.
In January, the average days on market surged to 53 days, up 36% from 39 last year. This is the highest average since June 2020. The median DOM was 32 days, up from 22 days in 2024. This shift suggests that buyers are taking more time to make purchasing decisions, and the market could also be affected in the short term by the unusual stretch of bad weather that pushed through the region during the month.
Months of inventory (MOI) spiked in January to 4.2, up 5% from the previous year of 4 and ahead of the previous month of 3.5. January notched the highest MOI since November 2019 and marked the 33rd consecutive month of year-over-year improvement.
Although inventory slowed from the previous month, overall housing supply reached 3,347 properties, a 15% increase over the 2,912 homes available last year. January registered the 15th month in a row of year-over-year growth and the eighth consecutive month with inventory remaining over the 3,000 mark.
The number of homes coming to the market slumped to January’s lowest level on record as new listings fell to 1,050, a 5% decline from last year’s 1,108, the previous monthly low. However, new listings did rise from the previous month’s total of 812, a boost of 29% month-over-month.
Hyatt continued, "This year will be interesting to see how the market develops with interest rates, home prices and market activity. Once the warmer weather rolls in, we will have a better sense of how 2025 will shape up. One thing is certain: additional inventory is needed to get back to a more balanced market to slow price appreciation and give buyers more options. This is a national issue that affects the whole country, not just the Bluegrass region.”
Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve. The interest rate in January averaged 6.96%, the highest since May of last year. This is up from last year’s 6.64% and the previous month of 6.72%.
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 38 counties: Anderson, Bath, Bell, Bourbon, Boyle, Casey, Clark, Clay, Elliott, Estill, Fayette, Franklin, Garrard, Harrison, Henry, Jackson, Jessamine, Knox, Laurel, Lee, Lincoln, Madison, McCreary, Menifee, Mercer, Montgomery, Nicholas, Owsley, Powell, Pulaski, Rockcastle, Rowan, Russell, Scott, Shelby, Wayne, Whitley and Woodford counties. Visit www.bluegrassrealtors.com for up-to-the-minute real estate listings and buying and selling resources.