2022 Housing Inventory in Bowling Green KY
National headlines continue to tell us the housing inventory has been at record lows for well over two years for a variety of reasons. Also that a “shift” or “correction” is expected. Most people just want to know if it’s a “Buyer’s Market” or a “Seller’s Market” and what that means for them to buy or sell a home. But I find that when I explain what inventory is and the basics of how it works, my clients have more realistic expectations for how properties are priced, negotiated and ultimately sold. They’re able to move forward and meet their goal.
So here is a mid-year review of the 2022 Housing Inventory in Bowling Green KY and South Central Kentucky to help put it all in perspective.
What does Housing Inventory mean?
Keeping it simple, inventory is the supply of properties available for purchase in a particular market at a given time. Generally speaking – and for this discussion – it’s the number of properties actively listed for sale in MLS (Multiple Listing Services). Properties that are “Pending” or “Under Contract” are still in motion and can return to market if the contract breaks down, so they are a part of supply until the transaction is closed and property is sold.
That said, when we discuss how much inventory is in the housing market, we’re actually talking about the number of months it would take for every property in the supply to sell.
Six Months is a “Balanced Market”
Imagine a simple scale with buyers positioned on one end and sellers on the other. Six months of inventory is generally considered a “balanced” market, meaning the number of buyers and sellers in the market at that time are relatively the same and it would take roughly six months for every property in the market to sell if no new properties listed. There is no advantage for the buyer or seller, so the scale is balanced.
What is a “Buyer’s Market?”
A Buyer’s Market is when there are more sellers than buyers in the market. Buyers can be picky, and sellers must work to make their home the best choice over all the others. How much advantage again depends on inventory. The further inventory goes above six months, the stronger the advantage to the buyer. So while seven months of inventory isn’t a huge advantage for buyers, it can impact negotiations. But an inventory of nine or ten months will put sellers at a measurable disadvantage.
What is a “Seller’s Market?”
When buyers out number sellers, sellers have the advantage. The further inventory drops below six months, the stronger the “Seller’s Market.” So while four or five months of inventory indicates an advantage to sellers, buyers are still engaged and have good options. But when inventory gets down to two months or below, there aren’t enough homes to support demand. Sellers have the upper hand with multiple offers and “bidding wars” are common. The market can feel pressured and chaotic for buyers.
How do We Know What the Housing Inventory for Bowling Green KY Is at Any Given Time?
My brokerage Keller Williams First Choice Realty (https://kellerwilliamsbg.yourkwoffice.com/) regularly produces an internal “Total Market Overview” Report or TMO Report for Bowling Green/Warren County to monitor inventory and the constant ebb and flow of the market. Data is pulled from our local MLS, so the breakdown of info is real as of the date report was compiled. Because properties continue to come on and leave the market, TMO reports offer one of the most realistic snapshots we have of our local market at the time.
I monitor these reports closely and use them to educate my clients every day. While there are always exceptions, most properties will fall into the averages outlined in the report.
I also serve outlying counties in South Central Kentucky, so it’s important to mention the trends found in the BG/WC TMO reports are consistent with outlying counties. Price points tend to be lower depending on area, however.
What Is the 2022 Housing Inventory in Bowling Green KY Right Now?
As of Friday, July 15th, we have just 2.0 months of housing inventory in our local Bowling Green/Warren County market. Clearly a strong seller’s advantage!
What’s important to mention is that it jumped from 1.39 to 1.72 on July 1st and has been ticking up just a bit every week since. Except for one week in January when it reached 2.04, inventory has stayed consistently well under 2.0 months for the past year. The lowest was .76 in mid-March and then it hung around 1.3-1.5 months in May and June.
What is a Shift in the Real Estate Market?
Most industry leaders project a “shift” or “correction” will occur at some point but can’t guarantee how quickly. Remember the scale? Depending on a variety of factors like increasing interest rates and inflation, the scale moves back and forth to find balance. That movement is the “shift” or “correction” they’re talking about.
What does the Housing Inventory in Bowling Green KY Mean for Buyers and Sellers?
It’s been a tough couple of years for buyers for sure, with this last six to nine months being downright brutal at times in an extreme seller’s market. Add in the recent jump in interest rates, and many buyers have been forced out of the market at least for the time being.
But when buyers who can still buy begin to walk away from properties they want because sellers won’t budge on high price or make essential repairs, the market can begin to shift. I began to see signs early this spring. Put off by bidding wars and the fear of overpaying, buyers postponed their search until the market cooled. That combined with the recent increase in price adjustments and open houses all indicate buyers are either unable or unwilling to buy as they have tried so hard to do to over the last year.
And when the number of buyers goes down, the scale will shift again.
The Bottom Line
The 2022 housing inventory in Bowling Green KY remains low mid way through the year, but signs indicate an increase is likely. Either way, it’s still a good time to buy and sell a home in Bowling Green and South Central Kentucky.
Prices will likely stay high for the rest of 2022 because wise sellers will continue to price their homes as high as they can realistically appraise. Why? Because they know most buyers’ financing requires an appraisal and only a small portion of the buyer population can afford to put down enough cash to pay at or over asking price. If inventory continues to increase, sellers will need to be a bit more reasonable with negotiations but can still expect to get top dollar for their well-maintained properties moving into the fall months.
Interest rates have increased a bit recently but remain historically low. So while buyers will continue to struggle a bit, lenders are still lending, and the good ones will be more than happy to coach motivated buyers on how to save for a down payment, improve credit scores and qualify for financing. Motivated buyers will do what their parents and grandparents did before for them. They will make adjustments to find a way to pay their mortgage instead of a landlord and grow wealth over time. Homeownership is still the primary way most Americans make it happen.
My recommendation for both is to partner with a strong, seasoned Realtor® who will continue keep them educated, advocate for their best interest and help them get the very best deal they can in the current market. As usual, making realistic, well informed decisions will yield the best results in 2022 and beyond.
I hope this information is helpful. Please reach out to me at email@example.com with any questions. I would love to help you meet your real estate goals!
Add A Comment