Kentucky REALTOR® News
The Kentucky housing market continued its strong start despite March being the beginning of the “COVID-19 season”. March home sales were up 3.6% over last year cresting at 4,194 (up from 4,048). Sales volume in March continued to climb, reaching $884.7 million. This bested the March 2019 figure of $773.9 million by nearly 15%.
Nationwide existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 8.5% from February to a seasonally adjusted annual rate of 5.27 million in March. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019).
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s chief economist. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Any slowdown Kentucky may experience in the housing market most likely won’t affect prices. The March figures show that the rising median prices are still on their upward trajectory. The median sale price (month-over-month) in Kentucky rose once again in March. It was up almost 10% at $179,500, up from $164,000 just one year ago. The March year-to-date median price is $172,191.
Sales volume was up significantly for the third month in a row. It swelled 14% in March reaching $884.7 million. This was up from $773.9 million in March of 2019.
“REALTORS® have adapted quickly to a changing marketplace over the last few weeks”, said Lester T. Sanders, President of Kentucky REALTORS®. “Virtual showings, procedural changes, and following CDC, state and local guidelines for safety have helped clients continue buying and selling their homes. REALTOR® best practices have softened the impact that a fearful reaction to the pandemic might have had on the housing market in Kentucky.”
The number of homes available on the market is dwindling ever further. That inventory figure continues to flirt with the sub-three-month mark. The March 2020 level of 3.1 months of inventory (down 14% over March 2019) remains well below the ideal level of a 6-month supply.
Home sales continued their strong showing in the early months of the new year. Closings were up about 9% at 3,384, up from 3,108 in February of 2019. Rising median prices meant larger transactions, though, and sales volume had an even more notable rise. Sales volume in February reached $667.5 million. This bested last year’s figure of $579.7 million by just over 15%.
Nationally, total existing-home sales completed transactions that include single-family homes, townhomes, condominiums, and co-ops, rose 6.5% from January to a seasonally adjusted annual rate of 5.77 million in February. Additionally, for the eighth straight month, overall sales greatly increased year-over-year, up 7.2% from a year ago (5.38 million in February 2019).
“February’s sales of over 5 million homes were the strongest since February 2007,” said Lawrence Yun, NAR’s chief economist. “I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.” Yun noted that February’s home sales were encouraging but not reflective of the current turmoil in the stock market or the significant hit the economy is expected to take because of the coronavirus and corresponding social quarantines. “These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.
The median sale price (month-over-month) in Kentucky for February was up 5.1% for the second consecutive month, reaching $168,000. In 2019, that mark was 159,900. The February year-to-date median price is $167.517.
Sales volume was up over 15% in February. This figure reached $667.5 million, compared to about $580 million in February of 2019. Lester T. Sanders, President of Kentucky REALTORS®, says that the effect of the coronavirus on the Kentucky market won’t show in housing statistics for a month or two. “A strong February and March will likely give way to fewer sales as the true effect of this global pandemic weighs on the Kentucky housing market. For now, the market remains busy,” he said. “REALTORS® will continue balancing the need and desire of their clients to buy and sell property and our efforts to keeping them safe.”
Homes available for sale remain under well below the ideal level of a 6-month supply. The February figure of 3.8 months of inventory is down 19% from last year’s figure of 4.7 months.
HousingIQ Survey of Kentucky REALTORS® finds home sellers take wait-and-see approach as buyers are growing discouraged by the recent stock market correction.
Nearly two out of three REALTORS® -- 65% -- said their buyers were significantly discouraged by the recent stock market correction, according to the March 2020 edition of the HousingIQ Survey of Kentucky REALTORS®. 84% of the over 700 REALTORS® polled from across Kentucky reported that their sellers had not removed their homes from the market due to coronavirus fears.
The HousingIQ Survey of Kentucky REALTORS® is administered monthly to the Kentucky REALTORS® membership as part of an effort to harness the ears-to-the-ground knowledge of REALTORS®. The responses are analyzed and reported as the HousingIQ/Kentucky REALTORS® Confidence Index. The March 2020 edition included additional questions to gather first-hand knowledge about the impact of the coronavirus on the Kentucky housing market.
The emerging trend is that there will be a shift to a buyer’s market and there will be more opportunities for single-family rental investors. In the next twelve months,
- 68% of respondents expect more houses to sell below asking price
- 60% of respondents expect houses to stay on the market for longer
- 69% of respondents expect the number of distressed sales to increase
- 55% of respondents expect increased sales to investors
Kentucky REALTORS® Communications Director Paul Del Rio says the Coronavirus’ true impact on the housing market will reveal itself in the next few months. “We anticipated a decline in activity as consumers begin to adjust to our current situation”, he said. “However, the housing market should remain strong and those who tough it out will take advantage of some great deals. We encourage Kentuckians to remember that REALTORS® are transaction troubleshooting experts and can help guide consumers through the home buying or selling process.”
The full report is available at https://housingiq.wainstreet.com/surveys/ky
Doctors say that, for most Americans, the seasonal flu poses a greater danger than the coronavirus, also known as COVID-19. Still, with many members traveling to both National Association of REALTORS® and KYR meetings and gatherings in the coming months, KYR leadership has been closely monitoring news on the disease and staying abreast of recommendations from the U.S. Centers for Disease Control and Prevention (CDC).
NAR has recently published guidance for REALTORS® to keep in mind as they conduct business on a daily basis.
What unique issues does coronavirus present to the real estate industry?
When an infectious disease, such as coronavirus, is associated with a specific population or nationality, fear and anxiety may lead to social stigma and potential discrimination. REALTORS® must be mindful of their obligations under the Fair Housing Act, and be sure not to discriminate against any particular segment of the population. While the coronavirus outbreak began in Wuhan, China, that does not provide a basis for treating Chinese persons or persons of Asian descent differently.
May I ask clients or others I interact with in my real estate business if they have traveled recently, or have any signs of respiratory illness?
Yes, you may ask clients or others about their recent travel, particularly to areas identified as having an increased risk of coronavirus. To avoid potential fair housing issues, be sure to ask all clients the same screening questions based on current, factual information from public health authorities.
I typically drive my clients to showings. May I refuse to drive potential clients to see homes?
Yes. However, be sure that any change to your business practices is applied equally to all clients. You may refuse to drive clients who show signs of illness or reveal recent travel to areas of increased risk of coronavirus, or you may instead decide to stop driving clients in your car altogether, and simply arrange to meet clients at a property. If you do continue to drive clients in your car, it is a good idea to frequently clean and disinfect surfaces like door handles and seat belt latches, and to ask clients to use hand sanitizer when getting in and out of the car.
Should I still conduct open houses on my listed properties?
Speak openly and honestly with your seller about the pros and cons of holding an open house. Assess the risk based on your specific location, and direct your clients to local and state health authorities for specific information about the severity of the risk in your area. You could also propose alternative marketing opportunities for your seller’s consideration, such as video tours and other methods to virtually tour a property. If you do hold an open house, consider requiring all visitors to disinfect their hands upon entering the home, and provide alcohol-based hand sanitizers at the entryway, as well as soap and disposable towels in bathrooms. If you decide to do any cleaning at your client’s home, be sure to check with your client in advance about any products you plan to use. After the open house, recommend that your client clean and disinfect their home, especially commonly touched areas like doorknobs and faucet handles.
What precautions should brokers consider taking in their offices?
Brokers should use their best judgment when formulating a plan. First, brokers should implement a mandatory “stay-home” policy for any staff member or agent exhibiting any sign of illness, and depending on where the broker is geographically located, a broker may want to consider imposing a mandatory remote work policy for employees and instructing agents to stay out of the office. In addition, taking measures such as holding virtual meetings or potentially postponing or canceling in-person meetings or events may be good measures to take to limit close contact between individuals. Be sure to monitor updates from the CDC, as well as your state and local health authorities for additional information and guidance on holding meetings or events.
Finally, do not panic, stay informed, and use your best judgment. The situation is rapidly changing, so focus on putting policies and procedures in place to keep your employees informed and safe, and to avoid business disruption in the event the situation worsens.
In addition, all members should take preventive actions to help prevent the spread of illnesses, including coronavirus and the seasonal flu:
· Stay home when you are sick.
· Wash your hands often with soap and water for at least 20 seconds. If soap and water aren't available, use an alcohol-based hand sanitizer.
· Avoid touching your eyes, nose, and mouth with unwashed hands.
· Avoid close contact with people who are sick.
· Cover your mouth and nose with a tissue when you cough or sneeze, or cough or sneeze into your sleeve.
· Clean and disinfect frequently touched objects and surfaces.
NAR is working on a plan to ensure continuity of business if conditions worsen. Several events, including the Association Executives Institute, scheduled for March 13-16 in San Diego, and Broker Summit, scheduled for March 31-April 1 in Los Angeles, will be affected by a non-essential travel suspension. Members who were registered or scheduled to attend those events or other meetings on behalf of NAR will be notified of the travel suspension.
KYR has not announced any changes to in-person meetings at this time. We will closely monitor CDC bulletins, NAR guidance and local situations that could affect any future events and will communicate any information via all channels. Please monitor social media feeds and the Cerkl newsletter for any news regarding this or other association business.
Known for giving back to the communities in which they work and live, REALTORS® care about their neighbors. One tool that REALTORS® have made sure is available to them in times of need is the REALTORS® Relief Fund. This charitable program can be activated to direct monies to those affected by natural and other disasters.
After floodwaters receded and it was clear that Kentuckians were enduring a hardship, Kentucky REALTORS® (KYR) and the Lexington-Bluegrass Association of Realtors® each contributed $10,000 to this cause. A matching grant of $20,000 by the National Association of REALTORS® Realtor® Relief Fund now brings the assistance available to residents of Kentucky who were recently affected or displaced by the flooding to $40,000.
Ten counties in the Commonwealth are considered disaster areas due to the February 2020 flooding. Property owners, homeowners, and renters in Bell, Clay, Harlan, Knox, Lawrence, Leslie, Letcher, McCreary, Perry and Whitley counties were affected by the heavy rains. Related damage, such as mudslides and a train derailment, accompanied the traditional damage done by rising water.
Any affected residents can fill out an application for assistance from the REALTORS® Relief Foundation and will be considered on a first-come, first-served basis. In order to ensure that the maximum number of Kentuckians receive aid, the maximum amount available per application is $1000. Those interested in applying should visit the Kentucky REALTORS® website at kyrealtors.com/flood for more details and to download an application.
KYR President Lester Sanders said that a priority of this program is to make the funds available immediately. “When major disaster strikes, the REALTORS® Relief Foundation has one goal: help families who have endured unimaginable loss”, he said. “It’s our hope that these funds make what is bound to be a very difficult time in the lives of our neighbors a bit more bearable.”
Those interested in supporting the fund to help others in times of need may do so by making a private donation. The REALTORS® Relief Foundation welcomes contributions not only in times of disaster but at any time throughout the year. Additionally, 100% of all funds collected go to disaster relief causes. Visit kyrealtors.com/flood to find out how you can help.
2020 is off to a great start with home sales jumping 18.5% over January of 2019. The closings figure reached a record high for the month at 3,153 homes sold, compared to 2,661 in January of 2019.
For the second straight month, overall nationwide sales substantially increased year-over-year, up 9.6% from a year ago (4.98 million in January 2019). Lawrence Yun, NAR’s chief economist, finds the outlook for 2020 home sales promising. “Existing-home sales are off to a strong start at 5.46 million.” Yun said. “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”
The median sale price (month-over-month) in Kentucky for January was up 5.1% at $167,000. In 2019, that figure reached 158,950. The median price has been steadily climbing as low-inventory figures in urban markets continues to act as a barrier to buyers making a move. Sellers continue to find the median sale price reaching 98% of the median listing price ($170,000) across the state.
January’s days-on-market (DOM) figure rose just under 5% over last year’s mark to 138 days. Another month-over-month increase comes as a relief to property owners who may have been waiting a bit longer to enter a pending status. With a shortage of homes entering the market, low inventory continues to affect affordability and buyer flexibility.
Sales volume was up significantly in January. A 21% increase in volume means total sales reached $11.15 million, compared to $9.9 million in January of 2019). Lester Sanders, President of Kentucky REALTORS®, says that rising prices are definitely impacting the economy. “With prices steadily climbing, the amount of dollars within the record number of transactions is noteworthy”, he said. “We continue to watch for any signs of a slowdown, but so far it looks like we could continue to see record-breaking statistics as we head into the warmer months.”
Homes available for sale remain under the ideal level of a 6-month supply. The January figure of 4.4 months of inventory is down 13% from last year’s figure of 5.1 months. This market condition is expected to persist through 2020.
Housing market data is a powerful tool for tracking trends and shedding light on how a particular area or market has performed over time. Historically, Kentucky REALTORS® has compiled housing statistics and published market performance data for public consumption. However, one piece that has always been missing was a predictive tool to use data to forecast how the housing market will perform in the future.
As part of its mission to educate and inform the public about Kentucky’s Housing Market, Kentucky REALTORS® has teamed up with data company HousingIQ to create a unique market forecast for the Commonwealth. HousingIQ has developed a platform that looks at various market input data, such as housing data, local labor market conditions, interest rates, and personal consumption, and then uses that information to predict how the average consumer’s financial situation and housing needs might affect the market over the next 12 months.
“It’s a comprehensive look at the myriad of factors that can affect the housing market in a given area”, said Vidur Dhanda, founder of HousingIQ parent company WAIN Street. “Quantifying the vitality of a housing market is a valuable tool for the real estate industry and it’s a great use of our economic data curated from both public and proprietary sources.”
Kentucky REALTORS® President Lester Sanders said this is just another way that the state association can serve both its membership and decision-makers across the state. “We’ve always been able to tell legislators how many homes sold in their district in a given month. Now we are able to convey what the market forecast looks like which can possibly shape policy” Sanders continued. “These decisions will affect the consumer and are tied directly to our advocacy goals.”
Currently in development is a REALTOR® market opinion survey which will take “street-level” knowledge and expertise and quantify REALTOR® confidence. This additional look at the market adds a human factor that transcends a numbers-driven formula.
KYR Director of Communications, Paul Del Rio, who is helping cultivate the partnership with HousingIQ, is hopeful that this will evolve into a powerful tool that is useful to more than just KYR REALTOR® members. “REALTORS® will love having this data to share with their buyers and sellers but the real estate industry affects almost every aspect of life and businesses in the state”, he said. “Lawmakers, small business owners, homebuilders and investors all have a vested interest in how the market performs. We are confident these reports will be a valuable resource to them as well.”
Senator Gerald A. Neal (D), Louisville, has filed a resolution honoring KYR President Lester T. Sanders. The bill was introduced on February 3rd and seeks to honor the Kentucky REALTORS® President, in part, for being the first African American President elected in its 97-year history. You can view the resolution's information at this link.
The resolution, as introduced, is below.
20 RS BR 1551
1 A RESOLUTION congratulating Lester Sanders upon being named the first African
2 American President of Kentucky Realtors.
3 WHEREAS, it is appropriate that this body honor those Kentuckians who become
4 leaders in their fields, and who blaze trails that future generations of Kentuckians will
5 proudly follow; and
6 WHEREAS, Lester Sanders is one such Kentuckian, and this august body rightfully
7 honors him on this day; and
8 WHEREAS, Lester Sanders is a proud graduate of Eastern Kentucky University;
9 and 10 WHEREAS, Lester Sanders worked for Semonin Realtors for 29 years and had
11 been named 2019 Realtor of the Year by the Greater Louisville Association of Realtors
12 and Kentucky Realtors; and
13 WHEREAS, Lester Sanders was recently named President of Kentucky Realtors,
14 becoming the first African American president in that organization's illustrious 97-year
15 history; and
16 WHEREAS, noting that Kentucky Realtors will focus on such important issues as
17 supporting local programs focusing on economic development and fair and affordable
18 housing, Lester Sanders vowed to continue to help Kentuckians with the most
19 fundamental decision of their lives: where they will live, work, and raise their families;
20 and 21 WHEREAS, the members honor Lester Sanders on this day upon this historic
22 achievement, and grant him very best wishes as he leads Kentucky Realtors into a new
23 and exciting future;
24 NOW, THEREFORE,
25 Be it resolved by the Senate of the General Assembly of the Commonwealth of
27 Section 1. The members of the Senate hereby honor Lester Sanders upon being
1 named the first African American President of Kentucky Realtors.
2 Section 2. When the Senate adjourns this day, it does so in honor of Lester
4 Section 3. The Clerk of the Senate is directed to transmit a copy of this
5 Resolution to Senator Gerald A. Neal for delivery.
Kentucky REALTORS® President Lester Sanders participated in an Affordable Housing Roundtable presented by U.S. Housing and Urban Development and hosted by H.U.D. Secretary Dr. Ben Carson on Wednesday.
The "Driving Affordable Housing Across America Bus Tour” kicked off in Louisville, Kentucky, at St. Cecilia Senior Housing Apartments, a public-private partnership that provides affordable housing to a portion of Louisville's low-income, senior citizens. In addition to a tour, Secretary Carson participated in a roundtable with community members aimed at reducing regulatory barriers to affordable housing and innovative ways to create more affordable housing, particularly for Louisville's most vulnerable populations. Kathryn Sotelo, President of the Greater Louisville Association of REALTORS® and KYR member, joined Sanders at the event. Also in attendance from H.U.D. was Denise Cleveland-Leggett, Regional Administrator for HUD Region IV. (pictured at center in photo)
President Sanders said it was an opportunity to hear and discuss specific challenges Kentucky stakeholders have regarding affordable housing. “It opens the door for future collaboration as we focus on fair and affordable housing”, he said.
Dr. Carson was pleased with the location chosen as the first stop on his tour across the U.S. "It was a pleasure to kick off our 'Driving Affordable Housing Across America Bus Tour' at St. Cecilia Senior Housing Apartments in Louisville today," said Secretary Carson. "This affordable housing development is a model that should be replicated in other communities across our nation.”
"Families, businesses, nonprofits, and community leaders all have concerns about the rising cost of housing," continued Secretary Carson. "This bus tour is an opportunity to bring everyone to the table so we can work together to eliminate outdated regulations and increase our nation's supply of affordable housing."
The "Driving Affordable Housing Across America Bus Tour" is a part of the work Secretary Carson is undertaking as the Chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing established in June 2019. The Council's eight Federal member agencies are engaging with governments at all levels-State, local, and Tribal-and other private-sector and non-profit stakeholders on ways to increase our country's housing supply so more Americans have access to affordable housing.
Secretary Carson's "Driving Affordable Housing Across America Bus Tour" will run through June 2020. For more information visit www.hud.gov/drivingaffordablehousing
KYR announces the release of the new Residential Sales Contract to be utilized by Kentucky REALTORS® members. 2018 President, Steve Cline, saw the value in a statewide residential sales contract and appointed an advisory group to review the contracts in use around the state and come up with a recommendation for a single Residential Sales Contract that incorporated all the best parts of the various contracts. Led by Chair Janie Wilson, the group felt that the benefits of utilizing a statewide sales contract would include:
• Risk Reduction and legal protection for agents and consumers
• The development of education at the state level that focuses on the proper use of the contract
• KYR’s Legal Hotline supporting questions on the use of the statewide contract
With agents increasingly representing buyers in areas of the state they don’t usually practice, it makes sense for agents to transition to a statewide Residential Sales Contract. In the past questions about certain unfamiliar parts of contracts would act as speed bumps to the transactions when REALTORS® would need to resolve questions with each other.
KYR President Lester Sanders said it’s his hope that the new contract will take some potential confusion out of the real estate transaction because REALTORS® and agents are sometimes presented with an unfamiliar document during a transaction. “It might reflect poorly if he or she couldn’t definitively answer a question by a client due to never having seen that version before”, he said. “A statewide uniform contract should help REALTORS® better work together and properly serve their clients with great confidence.”
KYR has established a standing Statewide Forms Committee to monitor and quickly react to marketplace changes that necessitate changes to the contract. Updates to the contract will be made as needed, or yearly, at the minimum. KYR is also planning to work with Kentucky Realtor Institute to develop education classes to train REALTORS® on the use and understanding of the contract.
The contract is now available for download on the Kentucky REALTORS® website and can be found under association documents in the Members section. Login is required.