Second Quarter Kentucky Market Update

Hi everyone! Today joining me, I have two of my certified home buying advisors, Cullen Wainscott and Allison Craig.

They are going to tell you some great news about our market!

Allison Craig 
There is definitely an improvement in our market; pending sales are up and we’ve seen a huge increase in between the months of April and May. The average price increased by 15.8% and average sales in general have gone up by 12.7%. That’s a lot!

Interest rates are similar. Last year and the beginning of this year we were seeing interest rates at an all-time low, around 3.25%. Within the past couple months, though, they have jumped to 4.29%.

A lot of people are stressed about this increased rate, but if we look at the history of rates, 4.29% is still considerably low. The average interest rate between 1972-2012 was 8.69%. We are at half that now!

Allison Craig    (859) 912-1386     Allison@DLREE.com

Cullen will tell us about distressed sales.

Cullen Wainscott 
Distressed sales made up 35% of the market last year and they have dropped by 17%! What does this mean for you? There is less competition of homes and higher prices!

I also wanted to share with you the difference in pricing by waiting a year to buy your new home. In 2012 you could buy a $200,000 home at a 3.5% interest rate with a monthly payment of $898.09. Now that same home is $220,000 at a 4.5% interest rate; this means your monthly payment increased by $216 to $1,114.71! Quite a difference!

Cullen Wainscott    (859) 496-7446     Cullen@DLREE.com

Another question we get a lot is, ‘are we expecting another bubble?’ is there a bunch of shadow inventory I need to worry about? To answer this we turned to Moody’s Economy.

They reported “Inventories of existing homes are as low as they were in 2000. New-home inventories have barely budged from a 50-year low. As a consequence, there are only 5 months of inventory for existing homes and 4 months for new homes, compared with 6 months when market conditions are normal…moreover, housing is at least fairly valued, if not undervalued. The boom and bust in housing left house price gains far behind income and rent gains.”

So in summary, pending home sales have increased, average prices have increased, distressed properties took a steep decrease, cost of waiting is increasing and interest rates are going up.

So if you or someone you know is thinking about buying, don’t wait. Give us a call at 859.727.4663!