Are You Prepared for Kentucky's 2021 Real Estate Market?
When COVID-19 started grabbing headlines, local economists were wary that real estate markets would be among the first to feel the effects, but the Kentucky real estate industry has remained strong as buyers maintained their confidence. In 2021, markets across the state are expected to continue moving forward in the same upward trajectory that they’ve experienced thus far, and that momentum is projected to increase. With the demand to move to Southern U.S. states steadily increasing along with a rise in novel work-remote positions, low-interest rates, and rapidly rising home sale prices, real estate agents all across Kentucky should gear up for another year of action.
2021 Kentucky Real Estate Outlook: Heating Up
As of December 2020, the average home in Kentucky was priced at $156,926. That’s a 6.6% increase year-over-year, and this figure is expected to increase dramatically. How dramatically? Zillow predicts the market will accelerate and rise 10.0% (or roughly 51.5% of 2020’s average home price). Rising prices and continued demand, despite 2020’s challenges and changes, are a promising sign that 2021 could be a very profitable year for real estate professionals.
Additionally, home sales across the Bluegrass State grew 12.0% year-over-year in October 2020. The median home sale price has also jumped from $176,000 to $200,000 during that same period. Thanks to record low-interest rates, continued strong demand, and lower-than-usual inventory, Kentucky will likely be a seller’s market with high prices and the scene of many bidding wars as 2021 unfolds.
On the other side of real estate, Kentucky rent prices have increased 4.8% year-over-year statewide but remain 33.3% lower than the rest of the country. Meanwhile, a total of 0.1% of Kentucky mortgages were reported as delinquent in June 2020. So, while new transactions boom and more people flock to Kentucky, current homeowners and investors are thriving.
2020 Kentucky Real Estate Market Data
|Zillow Home Value Index||$156,926|
|1-Year Change on Home Values||+6.6%|
|1-Year Change on Rent Prices||+4.8%|
|Homes With Negative Equity||4.0%|
|Delinquent on Mortgages||1.0%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Kentucky
In November 2020, the Bureau of Labor Statistics reported that Kentucky’s unemployment rate is 5.6%, down from 7.3% in October. Kentucky sits just below the national unemployment rate of 6.9%, but that’s likely to change as hospitality and retail markets around the state return to normalcy. Economic activity often correlates with growth in the real estate industry, and narrowing unemployment rates along with low-interest rates are a positive sign for Kentucky-based agents in the year ahead.
The Bluegrass State also features other attractive attributes that could contribute to the market’s heat in 2021. Kentucky is perfect for those with new work-remote positions looking to escape the high taxes, hustle and bustle, and harsh winters of large northern and northeastern cities, or those just looking to spread out.
Out-of-state buyers will also likely notice that they can get a lot more real estate for their money. Expect inventory to remain low, sale prices to stay high, and bidding wars to ensue. The Kentucky real estate market, while still a great investment that affords its homeowners a high quality of life, will almost certainly play out to be a strong seller’s market in 2021.
With an exceptionally robust 2021 economic prediction, Kentucky-based real estate professionals will need to be at the top of their game and prepare clients’s expectations for low-inventory-driven bidding wars. However, because more buyers are looking to make Kentucky their permanent residence, they are likely willing to pay more and could push the market to new heights. With that said, there has never been a better time to help your fellow Kentuckians find the property of their dreams.
Ready to Kick Off Your Kentucky Real Estate Education With The CE Shop?
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Kentuckians with the real estate they’re looking for, or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to hear more about what’s happening in the South and connect with other students? Join our Student Facebook group!