Survey: Kentucky Real Estate Market Reaches ‘Tipping Point’ | Kentucky
(The Center Square) – As the economy continues to falter, a recent survey of Kentucky real estate agents found that many expect the uncertainty to impact the state’s housing market.
Earlier this week, the Kentucky Association of Realtors released the latest HousingIQ survey results. According to the results, 77% of real estate professionals predict that homeowners will need more time to find a buyer over the next 12 months. This is 50 points more than a year ago.
Overall, the Kentucky Realtors Confidence Index is 33.3 for the month of May. For outlook, a score of 100 would indicate that all respondents believe market conditions will improve over the next 12 months.
The score marked the third consecutive drop in as many months and is the lowest since April 2020. The confidence index was at 49 in April.
The data shows that the real estate market has reached “a tipping point”, survey author Vidur Dhanda said in a statement.
Although there are signs of a buyer’s market, Dhanda pointed out that half of the agents who responded said they had turned away clients due to fears over rising mortgage rates.
“Sellers are trying to get ahead of the market downturn, with 61% of respondents expecting further price reduction from sellers,” Dhanda said. “However, that might not be enough for some buyers.”
The Owner Stress Index continues to hover around the 70 mark, as it has since the start of the pandemic. In addition, the survey found that the confidence index began to decline earlier this year, the purchasing power index began to rise significantly. It is now at 75.7 after being at 51.4 in February.
This likely means more opportunities for investors in the housing market. According to Dhanda, 38% of respondents said they had seen more investor activity in the past three months.
“As buyer prices are assessed, investors will strategically add to their portfolios as long as the rental market remains strong,” Dhanda said.
The survey is based on 210 responses from Kentucky Realtors, representing 26% of member brokers. These responses came in between May 27 and June 8, and the survey results have a 5% margin of error with a 95% confidence level.
Of the nine real estate markets in the Kentucky metro area, seven are currently listed as underperforming. The state’s largest metropolitan market is the Clarksville, Tennessee area, which includes Christian and Trigg counties in southwestern Kentucky. This market ranks 45th out of 402 metropolitan areas, according to HousingIQ.