May 2021

Thursday, May 27, 2021

The aggregate volume in pending home sales contracts for the state of Kentucky reached a record high last month. $2.2 billion in transactions were under contract in April 2021. This is up 47% over the $1.5 billion in pending sales volume for both April 2020 and 2019. Home sales numbers continue to be up year-over-year, but the meteoric rise in volume is largely due to the higher prices that the current housing market is commanding.

April 2021As expected, closed sales are up once again. In April, 4,738 homes sold. This is up 25% from 3,793 in April of 2020. The pending sales count was also up 25%, reaching 8,413 for the month.

Nationally, existing-home sales waned in April, marking three straight months of declines, according to the National Association of Realtors®. All but one of the four major U.S. regions witnessed month-over-month drops in home sales, but each registered double-digit year-over-year gains for April. The Southern region accounted for 44% of all existing home sales across the nation.

"Home sales were down again in April from the prior month, as housing supply continues to fall short of demand," said Lawrence Yun, NAR's chief economist. "We'll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.

The median sale price of homes in Kentucky for April was up about ten percent, to $205,000. Year-to-date, Kentucky’s median sale price is up almost twelve percent at $198,000.

“Across the Commonwealth, and the entire nation, housing inventory continues to be the main factor in both rising prices and the speed at which homes are going under contract”, said Charles Hinckley, President of Kentucky REALTORS®. “We encourage anyone considering listing a home for sale to consult with a REALTOR® to learn about all options available and how the market will react to their particular property.”

Kentucky REALTORS® C.E.O. Steve Stevens says that although this market pace is not sustainable for the long term, experts are not anticipating a crash. “Most economists agree that rising mortgage rates, more homes being added to the market, and slightly waning buyer demand will eventually lead to a market correction”, he said. “This should moderate prices and bring home ownership back into reach for those who might have been priced out of the market in recent months.”

Thursday, May 20, 2021

Citing widespread vaccinations and an early reopening, a second major rating agency has published a positive economic outlook for Kentucky. The Moody’s Analytics report is the latest in a string of positive economic news highlighting that the commonwealth is poised to prosper as the state emerges from the pandemic.

growthThe report notes “mass vaccinations will be the driving force behind a sustained recovery in consumer services,” “the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services,” that Kentucky’s “manufacturing industry has outperformed the nation’s” since an initial downturn nationally last year and “payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”

“Consumer industries are ripe for a rebound as mass vaccinations pave the way for increased local spending in the second half of 2021,” according to Moody’s analysis.

Gov. Beshear, in response to the latest positive economic news for Kentucky, said “Two major rating agencies, the U.S. Treasury Department, Site Selection magazine and our own sales tax receipts show while our economy is prepared to boom, this is just the beginning. Our economy is open, and we are announcing new, good-paying jobs every week. We must seize this moment to create a better commonwealth with more opportunities for our people in every corner of Kentucky.”

From the Moody’s report:

“Kentucky’s economy will improve after a modest pullback late last year. Mass vaccinations will be the driving force behind a sustained recovery in consumer services, while manufacturing will fare well once it gets past some near-term supply disruptions.”

“Kentucky’s economy lagged the U.S. prior to the pandemic, but the state’s recovery has benefited from earlier reopening efforts and increased demand for manufactured goods over services. Payroll employment surged in the first quarter and is now 4.9% below its pre-pandemic level, which is slightly better than the national average.”

“Manufacturing was one of the hardest-hit industries during the initial downturn last year, with employment contracting as much as 18% compared with 11% nationally. Since then, KY’s manufacturing industry has outperformed the nation’s, with more than 80% of lost manufacturing jobs being recouped.”

The Moody’s report is just the latest positive economic news for Kentucky.

The Governor announced that year-to-date, businesses have announced the planned and ongoing creation of nearly 2,750 full-time, Kentucky-resident jobs. That figure nearly doubles the 1,430 jobs announced throughout the same span in 2020. Businesses announced plans for 33 projects in Kentucky comprising nearly $1.5 billion in planned investment in addition to the more than 2,700 jobs.

Earlier this month, Fitch Ratings improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.

In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million.

While most Kentucky businesses have been fully open for months, the economy should be further ready to thrive when all businesses are able to fully reopen on June 11.

On May 28, all indoor and outdoor events of any size and businesses of any capacity can increase to 75% capacity. Just two weeks later, the state’s emerging economy is set for liftoff as final capacity restrictions related to COVID-19 end Friday, June 11. On the same day, the state will also eliminate the mask mandate for all Kentuckians with the exception of places where people are the most vulnerable. The Governor said he was keeping some capacity limits and the mask mandate in place until June 11 in order to give 12- to 15-year-old Kentuckians enough time to receive both doses of the vaccine before all restrictions are lifted.

With the Moody’s report evidence of the importance of vaccinations allowing Kentucky to safely and sustainably reopen its economy, Gov. Beshear encouraged all of those eligible to get their vaccine. As of May 18, 1,932,189 Kentuckians have received at least one dose.