It’s a seller’s market and other forecasts to know for a busy real estate summer

If you’re a buyer or a seller, there are two things to know about this summer’s housing market in Central Kentucky.

First, it’s going to be active and competitive.

And No. 2: It remains a seller’s market.

“We can expect to see a little more choice for buyers,” said Lisa Rehmel, a real estate broker associate at eXp Realty. “And that’s great for our sellers. ... We’re not seeing that it [a house] would sit for super long because there’s just a huge demand.”

Lexington-based real estate agents said buyers and sellers will be most successful if they’re prepared, ready to be flexible and stay well-informed about their options.

Bluegrass Realtors Board of Directors Treasurer Paula Elder wants buyers to know that “there’s no time like the present.”

Here’s what else you need to know.

Economic conditions shape market

As of mid May, 30-year fixed-rate mortgages are averaging about 6.8%, just slightly lower than where it was one year ago.

High mortgage rates mean buyers will pay more monthly for their house. Sometimes the trend indicates the market will slow down because costs are too high for buyers to even consider entering.

But the Lexington market has and is predicted to continue to favor sellers since inventory is relatively low compared to the steady demand for housing, said Melia Hord.

“The cost of waiting for a buyer is less than the cost of waiting for interest rates to go down,” said Hord, a real estate partner with Keller Williams Bluegrass Realty.

It’s not likely mortgage rates will drop significantly before the end of the year, and the Federal Reserve has indicated it would only make limited cuts to interest rates.

Elder, a real estate agent with The Brokerage, said if and when interest rates go down, the market will become even more competitive than it is now.

“So, it’s likely that you’re going to pay a higher home price [then, too],” Elder said. “You’ll either pay higher interest now or the higher purchase price later. The savings aren’t really there.”

Despite high interest and rising prices, Bluegrass Realtors reported at the end of April that sales volume in the Central Kentucky Region had increased year-over-year by 4.7% to $1.1 billion.

In Lexington, the median home sale price last month was $274,000, a price point up 3.4% compared to April 2024 when the median sales price in the region was $265,000, according to the trade association for 38 Kentucky counties.

Homes located in the Central Kentucky region spent a median of 16 days on market in April, just four days longer than the same month last year, according to Bluegrass Realtors.

While a bit slower than usual, Realtors told the Herald-Leader the time frame is still conducive to maintaining a healthy market where buyers have long enough to make an informed decision before putting in an offer.

Bluegrass Realtors also reported the number of new listings had increased 8.5% to 1,860 compared to the same month last year.

Still a seller’s market

In a seller’s market, demand outweighs supply.

The summer months are typically a frenzy of activity anywhere in real estate.

However, in a seller’s market, it looks like multiple offers per listing often with more attractive terms for the seller: Offers higher than their asking price, concessions on terms, buyers accepting properties “as-is.”

Kentucky Realtors President Barb Curtis said it’s still on the seller to upgrade their home to the best of their ability, giving it some TLC to make it ready to be shown off to prospective buyers.

“People are still going to have to put their best foot forward when they try to sell their property,” Curtis said. “You only get one shot to give a good impression. You can’t just throw something out there and expect it to sell because the market’s hot.”

Curtis said economists in the statewide real estate association expect median sales prices to remain stable and possibly creep upwards toward the end of summer.

By nature of a seller’s market and years of gradual price increases, Curtis said first-time homebuyers are getting pushed out of actualizing part of the “American Dream.”

“We’re going to have to, as a nation and as a state, look into some alternative housing,” Curtis said. “Manufactured housing, modular homes, tiny houses. People are going to have to adjust their feelings.”

To build or not to build

Rehmel said if buyers aren’t finding what they’re looking for, newly constructed homes can be a better option.

Newer builds sometimes have only single offers, and in some subdivisions, Rehmel said homes are sold through a lottery system.

Especially now that tariffs are looming over construction costs, Rehmel said buyers of new builds usually get less square footage for their dollar and completion timeline often doesn’t align with the person or family wanting to move in.

The impact of tariffs on the real estate market, especially on new construction, is still a “wait and see” game, Curtis said.

“We’re thinking it’s going to happen one way, but what if it doesn’t?” she said. “So, I think this might be the moment where you can maybe look at more houses, see what’s out there and see what happens with prices.”

What about refinancing instead of selling

Hord said she’s seen more and more Lexington residents sell to buy again. They use money earned on a sale to purchase a bigger home or something closer to work or school. The process helps homeowners continue to build equity and personal wealth without interruption.

Long-term ownership does the same thing for a family’s finances, and you might be considering refinancing instead of selling.

Refinancing might make more sense for a family planning to stay in their house long enough to recoup the upfront costs of a new mortgage.

Selling avoids those costs, but comes with its own, such as paying a real estate agent’s commission and for moving expenses. But selling can still be a better option for those who want access to their home equity or who are looking to move.