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Prospective home buyers compete with investors for small single-family homes

Pending Home Sales
Posted at 6:40 PM, Mar 29, 2022

(LEX 18) — With a combination of low-interest rates and a hot market, more people than ever are looking to buy a home.

The challenge is a good chunk of those house hunters are looking at an already slim number of homes within the same price range- under $300,000.

Chancellor Scott, Melissa Manley, and Chaney Hughes know because people come to guide reality for help to navigate this issue nearly every day.

"It's a lot of competition in that market," said Scott. "That's where a lot of first-time homebuyers are, that 250 mark, and where a lot of investors are getting those single-family homes."

Scott says they often help homeowners who come in with different financing options.

"We're seeing a real problem with people who have FHA, VA, USDA type loans. Those government-backed loans winning those bidding wars because there's a stigma," said Scott.

On top of investors, there are also out-of-state buyers to compete with who want to call the Bluegrass home.

Lexington-Bluegrass Association of Realtors is tracking some of those numbers. Of their 4,000 members who self-reported their sales, 269 properties were sold in Fayette County in February, 41 buyers were from out-of-state.

"My phone and the other realtors I know, their phone does ring a little more often since COVID," said President Rusty Underwood.

Underwood says while they haven't seen any data on an increase in investors in the area, they see a need for more housing.

He says right now, realtors are selling plenty of homes, but the current inventory doesn't reflect how active the market is. Active inventory in Fayette County is around two weeks.

"We're still experiencing relatively low supply of active inventory, but we are seeing a big demand still surging. The interest rates rising has not seemed to deter the demand yet. So, we're still seeing rapid home sales," said Underwood.

Guide Realty suggests buyers do their research early, so they're well-informed about what they're getting into.

However, they say homeownership is more attainable than people may think.

"Stay strong, keep trying, work with someone you trust that is going to work hard with you and help you along this process," said Hughes.