With the number of homes on the market still low and the cost to borrow cheap, the median home prices in Fayette County and the region continue to climb and set new records, according to a June housing report.
June’s median home prices marked the fourth straight month of record prices and hit $234,500 for the month, an increase of 17 percent over the June 2020 median home price of $200,000 and up 3 percent from the previous record last month of $227,750, according to the Lexington-Bluegrass Association of Realtors.
The data represents 26 Central and Eastern Kentucky counties, including Fayette.
In Fayette County, median home prices for June jumped to $280,000, a 19 percent increase over the June 2020 median home price, a new record.
Woodford County’s median home price also set new records for June — $305,000, a 45 percent jump from the prior year.
June marked the 12th consecutive month of double-digit price increases and the 28th straight month of year-over-year appreciation, according to a release from the association.
For the first time in eight months, there were more homes on the market — in June — than in the previous month.
Yet, inventory — the amount of homes on the market — is still tight, data from the association shows.
The 1,591 homes on the market represented an 8 percent increase over the 1,468 homes in May. Despite the rise in inventory, June’s 2021 total was 49 percent lower than the 3,110 homes available at the same time last year.
“Inventory is still a struggle for many buyers, but we may get to a point where market fatigue starts to creep in,” said Kristy Gooch, president of the Lexington-Bluegrass Association of Realtors. “Showings are starting to slow a bit, and pending sales were lower than last year. If inventory does improve, prices may still appreciate, but the rate of growth should level off.”
Across the country, home prices are soaring as the interest rates remain at near-record lows.
Will prices continue an upward trend in the months to come?
Lawrence Yun, the chief economist for the National Association of Realtors®, said home prices are in no danger of a decline due to the lack of available homes on the market for sale. The cost to borrow is still at all-time lows, fueling the market. But Yun is predicting a cooling of the market and slowing of appreciation.
“Local demand is still very strong, which will keep prices elevated, but double-digit appreciation shouldn’t be around much longer,” Yun said. “We may start to experience a plateau in the late summer, early fall months since the market finally took a deep breath and began to relax.”