Home prices in central Kentucky soar as stocks drop
LEXINGTON, Ky. (LEX 18) – Tracking your home’s value these days is a lot like a broken slot machine that keeps paying. It just keeps going up. Fourteen percent was the average price increase in Lexington. In Jessamine County, prices have increased by an average of 16%. In Scott County, they increased by 28%. And that was only February, before the real start of the busy season that experts call “realtors’ spring”.
So what gives?
“We need more housing,” said Meredith Lane of Sotheby’s International Realty in Lexington.
Inventory (supply) is down across the board, and buyers (demand) are flooding the market looking for good value given the low interest rates that remain in place. This is the simple lesson in economics. But what is the reason for the shortage of inventory?
“I really can’t answer that because the people I’ve talked to always do the same things and move for all the same reasons,” Lane said.
Lane added that many decide to stay seated because they fear they will have nowhere to go given the lack of options. What’s the point in having all that money from the proceeds of the sale if you have nowhere to go, or you just don’t want to be bothered by the process.
“It depends on how uncomfortable you are for a short period of time, either having two mortgages, or renting for a few months, or living with family,” she explained. Lane also said people can borrow against the equity in their current home to finance the new purchase.
John Wemble and his wife plan to move from Richmond to Lexington, and they gain first-hand experience of the difficulty of the home-buying experience in this climate.
“I had that feeling of what it was like to be heartbroken when the offer was turned down.” said Wemble.
John said he only made one offer and considered making a second.
“I think it was last Wednesday that my real estate agent showed it to me, my wife was going to watch it the next morning and it was already on hold,” he said.
Lane explained how this has become a very common scenario in this market.
“(I) set it up (a house) last night at seven o’clock, and I have about 20 screenings today. I got two offers and we have more screenings until 8:30 pm tonight, ”she said of a house her team at Sotheby’s recently listed.
This type of competition causes prices to skyrocket, but Lane warns of too high an asking price or a bidding war to the point where bids exceed asking price. Because if the appraisal comes back lower than what was offered, or without a loan / value cushion, that buyer will have to find additional cash to satisfy the lender, or you will have to lower the agreed selling price. .
“Most salespeople who see these numbers are really happy with what they see,” Lane said.
But most buyers are increasingly frustrated with not seeing what they see.
“It’s true in housing that if this one doesn’t work it wasn’t a good fit and we’re going to find one that’s better,” Lane said with years of experience guiding this thought process.
“I’ve had clients tell me, ‘you were right’ about this,” she said.
John and his wife will continue to wait for the same adage to come true for them.
“We love our apartment, so that’s no problem. We just think the time is right for us.
They just – like many buyers – need more housing to become available.