Low inventory levels combined with low mortgage rates created what some are calling a historic moment in the Hopkins County real estate market.
Across the country, new home sales rose 20.7% in March, their highest level since 2006. This was a recovery from the fall in February when severe winter storms hit many parts of the country.
“It was historic,” said Sandy Newell – executive director of the Madisonville-Hopkins County Board of Realtors, Inc.
Newell said interest rates were also “historically low”.
“In March last year everything was shut down for a few weeks. Then the locks just opened, ”she said. “The interest rates were so much lower and the stimulus checks could probably have had an impact – but it’s hard to say. It amazed us all. Interest rates are falling again now, but they are still low for what we had in the past. “
Newell said many board members have seen offers above list price.
“On the spot, I think we’re seeing offers that are above list prices, and we’re definitely seeing more multiple offers,” she said. “It’s a norm in your larger areas. We have never had many offers, but I know my members are affected. “
According to Newell, board members sold 58 homes in March for a total sale price of $ 10,010,051. Also in March there were 52 new entries and only 44 active entries at the end of the month.
Cindy McKenzie, a broker for Coldwell Bankers, said it was harder to bring property to market now.
“A lot has to do with lower interest rates earlier this year. They’re still low to move forward, ”she said. “As of Thursday, we have 22 properties for sale in Madisonville – and that’s it. They are all different price ranges from $ 50,000 to $ 700,000. There are only 22. ”
McKenzie said supply and demand are now just economy.
“We have far more buyers than sellers. We don’t have enough supply, so prices are rising, ”she said. “We have new constructions where the costs are much higher now because wood is more expensive and builders have to raise their prices. It all belongs together. There are 34 homes for sale in Hopkins County alone, including Mortons Gap, Hanson, Earlington, and Dawson Springs. Typically around 220 would be a normal listing. There are times when we have surpluses and shortages. This is the best we’ve ever seen unavailable or available in Madisonville and Hopkins Counties. “
McKenzie also pointed to the rise in building materials as a driver of the housing shortage.
“When the pandemic hit we probably had fewer workers so their supplies were lower and when we started opening up again and still doing some things, they didn’t have the supplies they needed to buy. It also had a little to do with economic supply and demand, ”she said, adding that this changes the way homeowners view remodeling versus building a new home.
“Before people would look, if they could build for what they would pay to remodel. That is less the case now, ”she said. “Now you can no longer build for what it would cost to just rebuild what you have. It’s a completely different timeframe right now, ”she said.
McKenzie has been a broker for 21 years and has never seen anything like it. She said anyone who wants to sell real estate should put it on the market.
“To keep the flow going, we need listings. We have to bring these properties out for people who want to change something, ”she said. “That’s how we earn a living and that’s how people get better. It is better when things move. “
McKenzie said this change affected all brokers and their work.
“We have some really good realtors in Madisonville, and we all have contacts, and we have all given our names to friends, families, past clients – but we have to to keep things flowing and keep things out of the way Walk away line. We need more houses to choose from so other buyers can choose from, ”she said. “There are people who need to have a place to live – whether they have sold or people come to our church, and we have let people come to our church. We have to find houses for them, and there is a battle between renting and selling. It’s an absolute fight. “
The rental side of real estate is also in the same situation.
“Now we have landlords who own decent homes that they have rented for years. They put their homes on the market to sell because now is a good time to get a good dollar number for their home, ”she said. “Some of the rentals are going away and people who rent who want to move up to home are not finding a place.”
McKenzie predicted it would for another year, but said the industry is still making headway despite the lack of homes available for sale.
“Despite the limitations on how many homes are available, Madisonville is still moving forward. It’s still a positive and great place to live. Even though we don’t have enough supplies at the moment, we can still find houses, ”she said. “Our market values won’t go down, but neither will our market value double, as it does in places like Nashville or Owensboro. Those are the advantages of a smaller city. When the market goes insane, it doesn’t go overly insane. “
On the mortgage side, financial institutions like Independence Bank and First United Bank remain busy trying to meet demand.
“There are a lot of sales and very little inventory. I have an employee who sold her house and didn’t expect it to sell anytime soon, and now she has nothing more to do, ”said Cheri McNary, loan officer at Independence Bank. “I think the stimulus checks helped with the down payment and closing costs, and our interest rates are at record lows. If you receive an interest rate of 2.5%, you can afford a higher payment than if you received an interest rate of, for example, 4.5%. “
Back at the start of the pandemic in 2020, McNary said the bank was busier than normal mortgage handling.
“We were crazy busy during the early days of the pandemic. We kept working the whole time, ”she said. “People who had a 30 year loan could get a 15 year loan because they could get 2.25% interest for 15 years, and it saved them so much money that they would cut off all the years of their home could . It’s just wild to see how busy we have all been. “
McNary said now is definitely the time to buy.
“Everything is still going so well and we hope it continues,” she said.
Chris Finley of First United Bank in Madisonville described the housing situation as a “unique circumstance”.
“The demand for mortgages is strong,” he said. “Inventories of homes for sale are lower than ever and mortgage rates are at all-time lows. So borrowers have more purchasing power than normal because interest rates are so low. “
Finley said the price increase in existing home sales is increasing rapidly compared to Q4 2020 and Q1 2021.
“In Hopkins County, sales were stable during the pandemic so we didn’t see a huge drop in sales,” he said. “What was in the market in 2020 when it was sold and closed and fewer properties were added to the market reached a point where listings were falling and sales were rising. It’s a matter of supply and demand. “
Finley said he anticipates mortgage rates will remain low for the foreseeable future.
“We assume that interest rates will continue to be low, and when interest rates are low there is more activity in the market. So if inventory remains low and rates continue to remain low, inventory will not be able to keep up with demands, ”he said. “I think in the short term the prices for new home sales will continue to rise, but the actual closings may decrease because if stocks remain low, there won’t be that many homes for sale. That could affect the number of deals closed, but I still think prices will be strong or will continue to rise. “