Central KY home prices hit a new high in December. Why there may yet be hope for buyers
Homebuyers had it rough in last year, and the latest available data from Bluegrass Realtors proves it, with median home prices reaching $240,000 in December compared to $222,400 in December 2021.
That makes for an 8% jump year to year, and a 3% increase from November, when the median price stood at $232,500.
In Fayette County, the median home price in December was even higher, reaching $285,000, up from $255,000 the same month in 2021, or a 12% increase year to year.
Some other data from Bluegrass Realtors’ final report on 2022:
December marked the 46th month in a row of year-to-year home price increases.
Across the association’s 30-county region, spanning Central and Southern Kentucky, the median price for single-family homes stood at $243,500, an 8% price increase.
Townhouses and condominiums saw an even bigger increase, up 16%, at $206,500.
The year ended at $4.2 billion in overall residential sales. That’s second only to the $4.4 billion reached in 2021.
Housing inventory ‘unusually low,’ president says
New real estate listings across the region were down 25% in December compared to where they stood in December 2021, with 775 residential properties versus 1,039, according to Bluegrass Realtors.
For the year, new listings averaged 1,563 monthly, which the association calls the lowest on record.
“Once the interest rates jumped, sales dropped and so did new inventory as buyers hit a level of uncertainty the market hadn’t experienced in quite some time,” Bluegrass Realtors President Kelley Nisbet said in a news release. “Although we knew activity from the previous 24 months couldn’t be sustained forever, buyers and sellers were caught off guard by the rapid spike in rates.”
That market uncertainty spooked sellers, too, as they reconsidered giving up cheap mortgages. As a consequence, transactions nosedived.
Home sales in the region plummeted 37% in December from where they stood the same month the previous year. Transactions dropped below the 1,000 mark for the first time since 2018, Bluegrass Realtors notes.
December home sales came in at 911, compared to 1,448 the same time in 2021. And sales for the year as a whole landed at 15,207 compared to 17,325 in 2021, a decrease of 12%.
For now, as indicated by monthly data from the office of Fayette County’s property valuation administrator, home sales activity in January was low. The most recent figures show just 36 sales in the county at a median price of $335,000.
Why there’s hope for homebuyers in Central Kentucky
Despite all this, there may still be reasons for homebuyers to be hopeful, especially with weakening interest rates, according Nisbet.
“Interest rates have softened a little over the past several weeks and, according to experts, are projected to land in the 5-6% range for most of 2023,” said Nisbet in a release outlining the housing market report.
Recently, the Federal Reserve announced its smallest interest rate hike yet, just 0.25%.
“Along with slightly more selection and homes staying active a little longer, buyers may not feel as squeezed going into the spring as they have over the past several months,” Nisbet added. “Sales may pick back up, at least in the short term, if rates fall and inventory expands.”
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