The end of August set a record for median house sale prices in Northern Kentucky, according to the Northern Kentucky Association of Realtors.
“The median sold price for residential properties increased by 9% year-over-year, to $305,000 from $279,321 in August 2023,” reads a Sept. 19 press release from the association. “To put things in perspective, the milestone of a median sold price above $200,000 occurred just 4 years ago in June 2020, at the start of the COVID housing market.”
Jessica Hurley, the current president of the association, gave an even deeper perspective, pulling the association’s data back even further.
“Our average sales price back in 2019 was $160,500,” Hurley said.
The association’s analysis only tracks sales made through professional realtors, so it’s only a single data source. NKU Professor Janet Harrah, the senior director of the Center for Economic Analysis and Development in the Haile College of Business, performed recent analysis from a variety of sources, including the association’s numbers, and her conclusions are more conservative, putting the median price of a home in Northern Kentucky at $291,720. A household needs to make at least $69,920 to afford a home at that price.
If you drill down into the realtors association’s data for the largest population centers in Northern Kentucky, you’ll see the average sale price in 2023 was $286,539. Exact figures vary by place.
A cursory internet search for single family, detached homes in that price range tends to yield three to four-bedrooms units around 1,500 square feet in size. This three-bedroom, 1,611 square foot house in Fort Wright, for instance, goes for $270,00 as of Sept. 27. This three-bedroom, 1,540 square foot house in Newport goes for $295,000.
So, any way to you slice it, the average sale price of a home has increased by at least $100,000 in last five years.
The realtors association characterized these conditions as a "seller's market." If you're a first-time home buyer, however, this state of affairs is incredibly hostile.
Independence Mayor Chris Reinersman, who works professionally as a real estate appraiser, affirmed the trends and spoke about how they're particularly acute for young professionals just entering the market.
"Typical housing appreciation varied from neighborhood to neighborhood [in the past], but 3% a year was a pretty solid number," Reinersman said. "We've been seeing double digit appreciation annually, and it's crazy and it's scary. I don't know what a newly married couple or young professional or young person out there for the first time, what they're going to do."
These prices are all downwind from a housing shortage that has played out throughout the United States. Low supply drives up prices and increases competition among buyers. Reinersman pointed out that homes now spend comparatively little time on the market before being bought up compared to the past.
A study of housing in Northern Kentucky has revealed troubling trends for housing in the region, with the largest need being for "workforce housing" for households earning between $15 and $25 per hour, with monthly housing costs between $500 and $1,500. The region needs about 3,000 more housing units to provide for people within that income range, according to the study. The demand for one- to two-bedroom rentals and owned properties consistently exceeds their supply, while supply for three and four-bedroom properties consistently exceeds demand. The study suggests that the region needs to build 6,650 housing units to support economic development in the next five years, which equates to 1,330 units per year. Read more here.
Understanding NKY’s housing shortage
"You could expect a house to be on the market for 60 to 90 days, pre-COVID," Reinersman said.
The association's most recent measure puts the average number of days on the market at 22.
Housing inventories are measured by the number of homes on the market divided by the number of homes sold in a given month. So, Hurley gave as an example, if 30 homes were for sale in a given month but only 10 were sold, that would mean there would be a three-month supply of homes in a given market. Four to five months of housing supply is considered a normal or balanced market, Hurley said.
"We have not seen four to five months [supply] since 2016," Hurley said, adding that as of January of 2024, the supply was 1.6 months.
Although it's a seller's market, Hurley said, some older home owners may not want to enter the market for fear of loosing their equity or being locked into newer (higher) interest rates. But freeing up homes is one way to ease the supply pressure, and she recommended anyone looking to downsize or sell to talk to a professional.
"I think that might be helpful to open up opportunities that they don't realize that they have for them to either downsize or get into the market," Hurley said.