According to officials in the local area, the real estate market in Owensboro and Daviess County is booming right now. However, one of the unintended consequences of a booming market has been a lack of housing options — for millennials and first-time home buyers, especially.
Interest rates on mortgages are down and, overall, the economy is doing well, which means more people are buying homes than in years past. In fact, homes listed at $200,000 or less are having a hard time staying on the market for more than several days in some areas across the state — even Owensboro.
“I see a lot of the millennial generation buying homes — they’re buying houses that are a little bit more expensive than they used to buy,” said REALTOR Devin Taylor, with ERA First Advantage Realty. “We’re one of the top areas millennials are coming to because we’re within a three-hour drive from several top cities.”
According to a news release from Kentucky REALTORS, a lack of homes for sale across the state is threatening a record-setting year for Kentucky. Even more, the median home price in Kentucky sits at an all-time high due to this housing shortage.
If it’s a seller’s market, then why are less people selling? According to Taylor, sellers who own homes in the $100,000-$250,000 price range may feel nervous about changing interest rates.
“I think a lot of that is because they’re at a very low interest rate. The interest rate is still low, but not as low as it was last year, or a couple years ago,” he said. “It’s a considerable jump — whether you downsize or upgrade — to increase your interest rate. You may [buy a cheaper house] and end up paying the same amount.”
Kentucky REALTORS say, for only the second time in 10 years, home sales for the month of June did not top those of the previous month. Historically, June sales have been 3 percent higher.
“June saw a 5 percent drop in that figure as closings fell to 5,097 sold. That’s down from 5,347 in May 2019,” said Kentucky REALTORS Director of Communications, Marketing and Member Programs Paul Del Rio. “We’re down year-over-year from last June by 2.4 percent.”
Del Rio said there’s a nationwide housing shortage and that much more inventory is needed to keep up with demand.
“The imbalance persists for mid-to-low priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” Del Rio said. “The median home price [in Kentucky] surpassed $140,000 for the first time just two years ago in July 2017. As expected, June 2019 set a new all-time high mark at $146,745, which is up 1.7 percent from June 2018.”
Taylor says while these are very real issues that are affecting the local housing market — especially the need for more inventory in the mid-to-low price range — Owensboro and Daviess County are seeing more success locally than in other parts of the state and nation.
“The national and state numbers do not reflect what’s happening here,” hes said. “In Daviess County and Owensboro, we’ve had record numbers this year for houses sold. Our home sales for June were higher than last year. However, houses at higher price points tend to stay on the market longer.”
While houses listed at under $200,000 are selling “extremely fast,” homes above that price range are having a harder time finding buyers, Taylor said. To blatantly say there’s a housing shortage in Owensboro would be inaccurate, Taylor said, because of the number of homes for sale in the mid-to-high price range.
And though some realtors are struggling to find mid-to-low priced homes for clients, Taylor said high demand is a good thing for the local area. High demand is the catalyst that promotes more housing development, stimulating a healthier economy, he said.
“There are going to be shortages in some price points, but it’s triggered growth in our community that has stimulated the growth of new developments,” he said. “The best advice for those hoping to buy, honestly, is to hire a good REALTOR. And I don’t say that because I am one. If you have someone looking out for you and for what you need, handle negotiations and know what’s available first — that’s your best avenue.”
