Home sales slow to start 2023 in Lexington and Central KY, but supply gets a boost

Homebuyers in Central Kentucky saw greater inventory levels in January than the same month in the previous two years, according to the latest data from Bluegrass Realtors.

The number stood at 2,613 homes across Bluegrass Realtors’ service area, which encompasses 30 counties throughout Eastern and Central Kentucky. It amounts to a 17% increase from the 2,231 homes on the market in January 2022.

The glut of homes available is largely due to slower sales. That hasn’t been helped by interest rate hikes from the Federal Reserve in a bid to get stubbornly high inflation under control. Currently, the national average is 7.13% for a 30-year fixed mortgage, according to Bankrate.

Homebuyers might get some relief should the Fed decide to take a smaller rate increase or even pause interest rate hikes given recent instability in the finance sector, but that remains to be seen.

Here’s a look at the state of the housing market in Central Kentucky.

Home prices up, sales down

For Fayette County, the latest available figures from the office of Property Valuation Administrator David O’Neill show single-family home sales have slowed to a trickle.

In February, Fayette County saw just 100 single-family home sales. While it’s normal for sales to peak in the late spring and early summer and wane in the winter months, it’s still far behind the 307 single-family home sales that took place in February 2022.

The median home sales price also shot up between January and February. PVA data indicate the price in Fayette County is at $302,750, compared to $270,000 in January.

Note: This graphic will automatically update as new data become available.

Taking a broader view of the region, figures from Bluegrass Realtors show 719 homes sold during the month of January, the latest month available. Compared to the 1,025 homes that sold in January 2022, it’s a decrease of 30%. Across the region, the median home price is $243,000, up 8% from last year.

Days on market have also been trending up in the last six months, according to Bluegrass Realtors, starting when interest rates began climbing. Properties are generally on the market 50% longer this year with an average of 45 days, compared to 30 days in 2022.

New listings in the region dropped 5% in January compared to a year ago, with 1,101 properties listed versus the 1,160 listed in 2022. The number of new properties on the market is the lowest total for January in more than 15 years, according to Bluegrass Realtors. It’s a sign homeowners have decided to sit out of the market and keep their cheaper, fixed-rate mortgages.

“Interest rates are still having an effect on homes sales,” Bluegrass Realtors President Kelley Nisbet said in the report. “Both for new buyers who would be taking on a higher mortgage rate and decided to stay on the sidelines temporarily and for those who purchased in the past couple of years when rates were historically low and are unwilling to give up that rate through the sale of their current home.”

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