NKY seller’s market returns after brief downturn
There are some industries that fit the model of the new normal caused by COVID-19. The real estate industry is one of them.
According to Realtors, brokers and other industry sources, the residential real estate market in Northern Kentucky is once again robust and could actually surpass levels reached in 2019. The reason: Realtors, agents and brokers have all adopted new guidelines that have made it easier and safer to show properties, allowing underlying market dynamics to quickly return.
“To put it simply, we masked up,” says Mike Spicer, president of the Northern Kentucky Association of Realtors (NKAR). “Showings at the same time have been curtailed, but agents also have other tools such as virtual tours through things like FaceTime.”
So what are some of the other new guidelines?
Whenever possible Realtors are encouraged to ride separately from clients to a showing. Everyone is strongly encouraged to wear a mask and practice safe distancing and each agent is encouraged to carry hand sanitizer and sanitation wipes for any surfaces such as lock boxes or doorknobs that are touched during a showing. When possible, agents and Realtors are encouraged to wear latex gloves.
The amount of time per showing, which was initially limited to as little as 15 minutes, has since been expanded back to 30 minutes to ensure that everyone who has an interest in a property has the chance to fully evaluate it. Brokers and agents are strongly encouraged to not allow overlapping appointments where two or more agents show the same property at the same time, says Spicer.
As the industry continued to work through the crisis, people started to become more comfortable with the guidelines that had been put in place. An industry that was off initially soon responded.
According to the NKAR and the Northern Kentucky Multiple Listing Service, Inc. (NKMLS), there was a significant drop in residential sales for the month of May 2020 over May 2019, a direct correlation to the COVID-19 shelter-in-place order for the state of Kentucky. Homes sold in May were off by nearly 26% over the same month last year. However, showings in the month of May were already on the rebound, so there was light at the end of the tunnel.
“During the early period of the shelter in place, we saw pending sales fall about 30% for three to four weeks,” says Scott Nelson, CEO of Comey & Shepherd Realtors, which has offices in Fort Mitchell. “Then a bounce back.”
The market in Northern Kentucky is mirroring statewide trends in Ohio, according to Chris Reese, who serves as president of Ohio Realtors, the trade organization that tracks the industry in the state.
“In May, our sales were down 25% compared to May 2019. This reflects homes going into contract in March and April,” Reese says. “Then in June, we were just about even with where we were last year in sales. This indicates buyers were all coming out in late April and early May and buying. I’m sure we will see even more of an uptick for July (numbers were not available at press time). In my market, we are seeing multiple offers for new listings within days of listing.”
There are some underlying market factors that are driving market growth. First of all, a home is considered a long-term purchase, where people look six to seven years down the road before even considering a move. So the entire COVID crisis will likely be over before there is any consideration of re-selling the home. And there have been new businesses relocating to Northern Kentucky, like Amazon, which are also driving up demand, creating tighter than normal inventories.
“Like many markets across the country, ours is faced with a shortage of inventory,” says Robin Sheakley, president of Sibcy Cline Realtors, which has offices in Florence. “The demand is very high and the supply is very limited.
“This is posing a challenge for buyers who are competing for every house that goes on the market and forcing them to make quick decisions and present the highest and best offer out of the gate. Having a well trained and experienced agent represent buyers is critical.”
It all makes the Northern Kentucky area a seller’s market, which is good news for home sellers or even those who are planning to list soon. There’s a fierce competition for new listings with offers coming in within the first few days on market. There has never been a better time to list your home for sale, adds Spicer.
“If you are going to list a house in Northern Kentucky, depending on the price range and when you bought it, you are going to do pretty well,” he says. “But if you are going to stay in the same area, you are going to face some challenges when it comes to finding another home.”
Spicer says that he is seeing an increase in new home construction in the Greater Cincinnati area, but especially in Northern Kentucky where construction costs and land tend to be a little less expensive.
“I can’t speak for builders, but they are seeing the same trends that we are seeing,” Spicer says. “And one of the reasons they are building houses is because we have a very low inventory of houses. If a house gets listed for under $250,000 it tends to go very quickly and with multiple offers. Builders right now are building houses as fast as they can.”
While the news is good for sellers, there are some obstacles for those in the market for a home, especially first-time buyers, Spicer notes.
Low listing inventory is causing some hardship for all home buyers but especially first-time buyers because fewer homes for sale causes the prices to go higher and higher, which tends to price first timers out of the housing market. First timers typically have a lower budget to work with and are more likely to ask for assistance with closing costs. So, when the house of their dreams goes into a multiple-offer situation, it’s usually the offer with the least contingencies and/or the highest price offered that wins the bid.
However, the long-term market dynamics still make home ownership in the Northern Kentucky market very attractive, especially when you compare it to other major markets around the country. As president of the NKAR, Spicer travels to other major metropolitan areas for meetings and other business.
“And one of the first things I do is to check local real estate prices,” he says. “It always amazes me what you can get for your money in the Tristate area. You get more for your money here than just about any other major metropolitan area.
“This is a fantastic place to work, live and raise a family. For years, the Northern Kentucky market was a well-kept secret. But now, with recent development and companies like Amazon locating here, that secret may be out.”