2018 ends with strong increase in inventory
Consumers in the Bluegrass region entered
2019 with more homes on the market, according to the Lexington-Bluegrass
Association of REALTORS® (LBAR). December numbers showed that total housing
inventory was up 7 percent versus the same month the prior year, jumping from
3,440 to 3,679 active properties, marking the fourth consecutive month of
year-over-year increases. This, coupled with slower sales for the month, led to
the months of inventory to spike 21 percent over last December, ending 2018 at
4.1 months of available properties compared to 3.4 months in 2017.
“The
weather certainly played a large role in the housing market at the end of year,”
said Al Blevins, 2019 president of LBAR. “Weather reports indicate that 2018
was the wettest year on record for Lexington and December was certainly one for
the books as well.”
Home
sales for the month of December declined, falling 11 percent from the same
period the prior year, with total sales reaching 887 in 2018 versus 1,000 in
2017. Both single family and townhouse/condo sales dropped the same 11 percent for
the month. Single family home sales decreased from 939 to 833 while townhouse/condo
sales fell from 61 to 54. For the year, home sales slowed 5 percent over 2017,
reaching a total of 13,278 for 2018 compared to 13,929 in 2017.
Prices,
though, were a different story as the median home sold for $169,900 in December,
versus $161,500 in December 2017, an increase of 5 percent. For the month, single family homes hit a median of $173,000, compared to $162,500 last year, a 6
percent increase, while townhouses/condos sold for $115,000 in December, down
15 percent compared to last year’s median of $135,625. For the year, median
prices jumped from $160,000 in 2017 to $168,900 for all of 2018, an increase of
6 percent.
Total
sales volume for the month saw a drop of 12 percent year-over-year, while the
annual sales volume dropped 1 percent, ending at $2.67 billion versus $2.69
billion in 2017. The annual sales volume decline was considerably smaller due
to the increase in home prices even though total sales were lower for the year.
“2018
turned out to be a solid year for real estate overall. The trend seems to be
fewer homes selling in Fayette County, which represents just over a third of all
home sales in LBAR’s market area,” said Blevins. “Counties adjacent to Fayette
are representing a larger percentage of real estate transactions as people are
moving into these areas due to growth and development opportunities. Some of the
counties to the east and south of Fayette are also seeing an uptick in sales.”
Even
with slower sales, the time a home took to sell continued to slip as it hit 56
days in December, a 3 percent decline versus the same time last year. For the
year, days on market (DOM) dropped 4 percent to end 2018 at 52 days. Data also
showed the number of homes that stayed on the market under a month dropped to
50 percent, the lowest it’s been since January 2018 when that number was 46
percent. It jumped to a high of 69 percent in both June and July.
On
the national level, December saw home sales drop just over 10 percent
year-over-year with median prices increasing almost 3 percent for the same time
period. December’s increase marked the 82nd straight month of
year-over year gains. Inventory levels nationally jumped 6 percent in December versus
2017 while the months of inventory rose from 3.2 months last December to 3.7
months this year, a 16 percent increase.
“This
year, home price increases should slow a bit and if inventory levels continue
to increase, even slightly, consumers should have an easier time entering the
market and finding what they are looking for,” according to Blevins. “The Fed
has indicated less rate hikes for 2019 and we entered the new year with lower
mortgage rates than expected so that should benefit consumers now and well into
the spring buying season if they stay at current levels.”
As the region’s leading advocate for
homeownership, Lexington-Bluegrass Association of REALTORS® (LBAR) understands
the value and joy of owning a home. LBAR represents more than 3,300 REALTORS®
located in 22 counties: Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Fayette,
Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Menifee, Montgomery,
Nicholas, Powell, Rowan, Scott, Whitley and Woodford Counties. Visit www.lbar.com
for up to the minute real estate listings and buying and selling resources.