MADISON COUNTY, Ky. (FOX 56) – Interest rates have risen again as the Federal Reserve continues to try and bring inflation under control.
That means the cost of borrowing money is hitting consumers even harder and the effects are rippling across several fields, including Kentucky’s real estate and the ability to buy a home.
“I’ll pull up like my Timehop app on my phone too from like 2010 and I’d be like, ‘off to show my buyers 20 houses today!’ Like, there’s not even 20 houses on the market now,” Amanda Marcum told FOX 56.
Marcum is the owner of MARCUMsold and a franchise of Berkshire Hathaway Homeservices Foster Realtors in Madison County.
Potential homebuyers already know there are not many options currently on the market. In the post-pandemic effort to stabilize the economy interest rates are climbing, leading to many mortgages surpassing the 6% range. A far cry from the rock bottom brought on at the height of the pandemic.
“So now with the rates being double of what they were, there’s still though, if you look at all interest rates like throughout history going back to the 70s, 5’s and 6’s are still historically very low. When I got in the business in 2008 this is where they were,” Marcum said.
Marcum said while today’s rates can be scary, they can change or be refinanced. It’s part of how cyclical the business is.
During the real estate crash of 2008, she said houses would sit on the market for months, now it’s the opposite. Marcum said as of Thursday there were only 206 active residential properties for sale in Madison County. She said the average would typically be around 1,000 with about 25 of those listings being managed by her agency.
On Thursday she only had 7 listings.
“There’s just not 20 houses to show, you might get 3. But a couple months ago you had 1, you know so like it’s trending towards buyers having more options,” she said.
Marcum believed it’s partly due to the pandemic’s ripple effects on the cost and timeline of home construction. Although there’s scarcity now, she is starting to see the market return to its healthy pre-pandemic state, but in the meantime, today’s buyers have tough choices
“They have to make decisions that aren’t necessarily ideal like you said, like either not having inspections or not asking for any repairs,” Marcum said.
Although Marcum believes it is discouraging for buyers to settle, real estate is a long game. She has worked with previous buyers on improving their property value over time and recommends a strategy to eventually sell it for that dream home.