Real estate agents feeling good about outlook of Northern Kentucky market

Despite low inventory, sales up year over year
Posted at 12:00 PM, Jul 17, 2017
and last updated 2017-07-17 12:00:53-04

FLORENCE, Ky. -- Home sales have slowed slightly over the last month or so in Northern Kentucky, but not enough to stop real estate agents from being optimistic.

After all, year-over-year numbers provided by the Northern Kentucky Multiple Listing Service show an increase of 609 sales in seven Northern Kentucky counties – Boone, Kenton, Campbell, Grant, Pendleton, Bracken and Gallatin – from May 2016 through April 2017 compared to the same period a year prior.

"We are 20 to 25 percent short in inventory but still ahead in sales," said Mike Parker of Huff Realty in Florence.

There’s a national trend of fewer homes for sale, according to the National Association of Realtors, based in Chicago. In a recent press release, NAR chief economist Lawrence Yun said buyers remain interested, but there's not enough supply to satisfy demand.

The bulk of sales in Northern Kentucky are in Boone, Kenton and Campbell counties, with 6,532 homes sold in the recent period compared to 5,919 previously.

The difference this time? With fewer houses on the market, buyers have fewer choices in each price category, said Parker. But lower interest rates and a younger target market of families are driving sales.

“Interest rates are going to stay below 5 or 5.5 percent for the next year and a half,” said Parker.

Rates on July 13 were still at 4.25 or less for a 30-year loan, which drives buyers.

Parker, who compiles market statistics weekly, said sales are on track to do slightly better than last year even with fewer houses on the market. Statistics for July 12, 2015, show 2,607 houses listed and 1,115 sales pending in the seven Northern Kentucky counties and parts of Carroll and Owen counties. On July 9, 2017, however, there were only 1,607 active listings with 1,139 pending sales.

Another category that’s disappeared: foreclosures and short-sales.

“They’re a thing of the past,” said Parker. He said the category counts for less than 5 percent of homes, compared with 25 percent from 2007-2013.

The traditionally slower months of June and July appear even slower this year.

"Anything over $250,000, and in some areas over $225,000, is not moving," said Parker.

His team of realtors is shifting gears to accommodate the change with increased social media and advertising, along with boosting the quality of photos and videos.

Even with lower interest rates, some buyers may still decide to rent.

New home construction is helping in Northern Kentucky, but most new homes are priced at $250,000 and up, say Realtors. That leaves only pre-existing homes for buyers who want to spend less. In the first quarter of 2017, 182 building permits for new homes were issued, compared to 148 in the same period for 2016, according to the Building Industry Association of Northern Kentucky (formerly the Home Builders Association of Northern Kentucky).

New homes tend to have less space compared to pre-existing homes, said Parker. Even garden homes — those with small lots that are usually managed by an association — tend to be $250,000 and up.

Prices are also up 3.5 percent to 4 percent for pre-existing homes, said Parker.

Some price categories sell better than others. Cullen Wainscott of Berkshire Hathaway Home Services Professional Realty in Covington said anything under $150,000 sells really quickly.

Some houses instantly get multiple offers, including one recently that had several bids at the first open house, he said. Unfortunately, they’re not all that simple.

"Some agents talk about it being a hot market, but I've had listings last a month and a half,” Wainscott said.

Not bad, he added, but not quick. On the other hand, some homes that he said are in rough shape are selling when they might not have in 2005.