There is no slowing down the residential real estate market in March! First quarter 2017 had an increase of 12% for total sales activity compared to the same time last year. Homebuyers continue to see the value in buying real estate and taking advantage of the still low interest rates. Owning a home is an American dream and now is the time to buy. Spring is historically known as the buying season in the real estate world.
Declining inventory has become the norm (for now). Even though inventory is low, there are record sales. Buyers will want to make their decision quickly in order to get their dream home. Sellers are selling fast, so buyers act fast! That is evident in the 20% decrease in the residential average days on market in March.
To gather a pulse on the real estate market experts use what is called months of inventory. This is the amount of time it would take to sell all current listings at the current sales pace if no new listings became available. For the entire LBAR area, there are 3.5 months of inventory. However some specific counties and neighborhoods have even less months of inventory. Fayette County has 1.9 months of inventory. The tight supply in Fayette County, due mainly to the absorption of any excess supply, has fueled sales in neighboring counties. Which means buyers are increasingly choosing to expand their search area to those counties and commute into Lexington for work since homes are not as readily available in Lexington. LBAR does not see this trend slowing without some significant changes or an increase of new homes being built to enter the market. Scott County residential sales activity was up 5% to 230 sales in first quarter 2017. Scott County has 3.2 months of inventory.
The eye-catcher of the month was the significant decrease in days on the market. Residential sales averaged 68 days on market (20% decrease compared to March 2016) and townhouse/condo sales averaged 70 days on market (29% decrease compared to March 2016).
The Central Kentucky area remains dominated by a seller’s market but beware, it could be a buyer’s market in your neck of the woods. Many factors such as school district and price range impact buyers and sellers.
March’s bump in pending sales is proof that demand is rising with spring on the doorstep. There were 1,458 pendings in March 2017. Buyers came back in force in March as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the area. March’s warm weather played a role in kick-starting prospective buyers’ house hunt.
Looking ahead to the busy spring months, LBAR expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers. The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy.
Ty Brown is the president of the Lexington-Bluegrass Association of Realtors. LBAR represents over 2,900 Realtor members, serving 22 counties in the Central Kentucky area.