If you were a homeowner in 2005, you likely experienced one of the most prolific financial hurdles of your life. The housing market crash of 2005 ended up creating a domino effect that would ripple throughout the industry. Due to the crash, which saw homeowners all over the country lose their mortgage, people have since become gun-shy about purchasing properties. Thankfully, the housing market has corrected itself and markets from Lexington, KY, to Las Vegas, NV, are rebounding. As a result, now is as good of a time as ever to consider putting your property on the market.
Selling Your Home in Lexington, Kentucky
Lexington is the second-largest city in all of Kentucky. Thanks to a strong economy and a relatively affordable cost-of-living, the region is continuing to bring in transplants from all over the nation. As a result, homeowners in Kentucky are looking at their first real opportunity to offload their property at a great price since at least 2004. While supply and demand are the two largest instigators of a booming housing market, there are other reasons as to why you should be considering selling your Lexington KY real estate. Let’s dig a little deeper into this topic so that you can walk away with a comprehensive understanding of the market conditions that Lexington-area homeowners are going to be facing.
1. Kentucky’s Real Estate is Trending Up
Right now, much of the country is still enjoying a boom within their local housing sector. Here in Lexington, as well as the surrounding areas, homes continue to move off of the shelf. Not only are more homes currently being sold in our neck of the woods, but we are also seeing homes getting a better price than they have in other markets. Consider, over the last year, homes sold in the Lexington market have experienced a full 4% increase in median sale price.
At the same time that homes are being sold at an average increased price, smaller homes are also seeing similar benefits. According to the analysts at Trulia, from 2018 to 2019, the price per square foot has increased from $129 to $135. We are seeing more homes being sold for better prices. Those signs are incredible for the region and even better for property owners that are looking to get out from under their mortgage.
We are also seeing more buyers entering the market. While interest rates are increasing nationally, homebuyers have still remained relatively consistent across the board. With lower housing inventory in Lexington, motivated buyers are still going to keep shopping for homes. Millennials make up the largest new wave of homebuyers, and the vast majority of these millennials are making their first housing purchase. According to a study conducted by Harris Poll, more than 20% of Americans aged between 18 and 34 are planning to make their next home purchase within the coming year. This poll was conducted during late 2018.
What Do We Know: Lexington has been particularly resilient to the ebb and flow of the housing market. Despite some national warning signs, such as instability in Washington D.C., housing trends in Kentucky are currently holding steady. With that being said, there are no guarantees what will happen in the coming years. If you are looking to avoid potential instability, consider taking advantage of the strong housing market and the surplus of buyers currently interested in making a purchase in and around Lexington.
2. Strong Interest Rates Continue to Hold
Over the past several months, national mortgage interest rates have taken something of a hit. We’ve seen interest rates for fix-rate, 30-year mortgages reach their highest levels since 2014. As of late February of 2019, interest rates have managed to fall back to a tolerable 4.35 percent. Because of this, home buyers who were potentially spooked by rising rates last year might have a change of tune.
With interest rates down to a tolerable level, bolstered by last year’s scare, potential buyers might be more motivated and inclined to lock in a rate while the rates are good. With that being said, you do need to understand that interest rates are more tied to housing activity, your own financial status, and the state of the properties that you are interested in purchasing. Just because you hear on the news that the Fed does one thing, you shouldn’t immediately expect it to apply to your specific situation.
What Do We Know: Motivated home sellers in Lexington, as well as the surrounding area, should be able to find a buyer that is equally motivated to make a purchase. With general instability persisting at the highest levels of the American government economy, reinforced by potential policy shifts with the Presidential election around the corner, it shouldn’t be impossible to get out from under that property that you have been wanting to sell.
3. You May Be Motivated By High Equity
If you purchased your home when the housing bubble popped, you likely are sitting on a hefty amount of equity. Home prices stayed low from the initial housing market’s crash all the way until the recession ‘ended’ in 2015. Before the bounce-back period that began in 2015, new homebuyers throughout the nation benefited from historically low interest rates.
For the sake of this discussion, let’s speak specifically to homeowners who made their purchase during this period of time. With such low interest rates, each additional mortgage payment or renovation would lead directly to equity in your home. The more equity that you have, the more you can earn from the sale of your property. With the housing market in and around Lexington being so active, now is a great time to cash in on all of your hard work.
There is, however, a difference between equity and profit. Equity is nearly a conceptual idea. What do we mean by this? Well, if you hold your property until the next economic downturn, you might end up sacrificing what you have earned. Profit, on the other hand, comes when you sell your property in order to actually translate that equity into cash.
What Do We Know: Home sales are on the rise in Lexington, but housing inventory is staying relatively complacent. Now is a great time to cash out of the property that you have been investing in over the past decade. With the economy still in decent shape, you should be able to make the most out of your sale. Best of all, the housing market is still in good enough shape that there are plenty of buyers looking to take advantage of what you have to offer.
4. Nobody Knows What 2020 Will Bring
As we’ve hammered home several times during today’s conversation, there are currently real concerns about the future of the economy. According to a study performed by Zillow, almost half of the one hundred polled economists and real estate experts believe that a recession is due next year. Digging into the numbers even deeper, roughly 70% of those panelists believe that the recession will occur next year or even earlier. While these numbers are far from predictive, they do paint a story for current homeowners. If things are great now, but they might be much worse in six months, how much waiting should you really be doing?
What makes the real estate industry both fascinating and frightening, is the fact that patterns tend to replicate. According to the research that went into the aforementioned Zillow study, current real estate patterns are indicating that we are likely at the zenith of the market’s operating might, at least for the foreseeable future. If you are gambling on the market growing even more fertile for sellers, you might be waiting in vain.
What Do We Know: It’s almost impossible to predict the future, but we can gain insight through prior patterns. Right now, the housing market appears to be as good as it is going to be for the conceivable future. If you are averse to risk and ready to get out from under your Lexington KY real estate, now is the time to make it happen. With the 2020 Presidential Elections currently around the corner, waiting can only become a risky concept. Nobody knows what policy changes, financial shifts, or housing recessions are currently on tap for the future.
Taking Advantage of Kentucky’s Housing Market
If you are a property owner in Lexington or any of the nearby areas, you might feel more motivated than ever to sell your property. Having said that, you aren’t going to want to begin the process on your own. Here at Capstone Realty Consultants, we make it our job to keep track of the beating pulse of Kentucky’s housing industry.
We understand that selling your house can be an intimidating, exhausting, and, at times, frightening experience. With the helping hand of a reputable real estate consultant on your side, you won’t ever have to feel like you are out of your depth. A reputable realtor can help you maximize the value of your home.