If you’ve ever been to King’s Island or practically any carnival, there’s always a game on the midway called Whack-a-Mole. The goal of the game is to take an oversized mallet and whack a mechanical mole as they pop out of a hole at various locations on a flat board. The mole pops up for a split second, so it’s a great test of eye-hand coordination and your reflex speed. If you’re really good, you are able to whack dozens of moles and walk away with a giant stuffed animal. If you’re only average, you get the little 4” stuffed animal from under the counter. We are living in a Whack-a-Mole world when it comes to the delivery of economic news, both good and bad. During the same day or even same hour, we will have good retail sales numbers pop up through one hole and before we’ve had time to enjoy the good news, another “mole” pops up with bad employment news, or manufacturing news, or any of the dozens of other economic indicators that are tracked.
Growing up in the late 60’s and early 70’s, we received our news once a day from Walter Cronkite, and usually received a once a month update on how the economy was doing. The information age has created this flood of instant data, and we wonder why buyers can’t seem to make a decision in our market. Just when they think it might be safe to enter the market, there’s a new report of impending economic doom. The availability of information doesn’t create the challenging market we are in, but it sure makes it more difficult to pull out of it.
Central Kentucky Real Estate Market Update
How’s the market? I get that question every day from friends and strangers alike. There is no doubt that this is the most challenging market of my 18 years in the business and I hear the same thing from agents who have been in the business much longer than me. My new answer is it’s like a marathon. Kentucky market statistics show that we are in the middle of a marathon, but we don’t know where the finish line is. Some days it’s raining and cold, some days we’re running uphill, some days we’re running downhill, and some days we are running in perfect conditions. We are only at mile 5 or 6 in a 26 mile race, so we can’t really be concerned about the finish line at this point. We have to keep doing the things that will get us to the finish…keep hydrated, take in energy, and maintain our form and pace regardless of what’s going on around us. We have put in years of training for this race; otherwise we wouldn’t still be in the race. The truth is I don’t know where the finish line is for this current market, but I do know I won’t be around to see the finish line if I don’t continue to take care of the basics.
Bluegrass homes
What we can’t do is become groundhogs. When times become challenging, it can be instinctive for us to retreat to our bunkers and wait for better days. However, if we occasionally stick our heads out of our holes to check on conditions, at some point the market is going to blow right by us and in the meantime we become fat and lazy lounging around in our groundhog holes. This applies whether you’re a real estate agent, a buyer, or a seller. This market will pass you by if you go into groundhog mode. We all have to be more diligent than ever in order to be successful. Even in this market, there are success stories being written every day (locally, we will close nearly 1 Billion dollars’ worth of residential real estate this year). As a buyer or seller, now more than ever is the time you need a professional on your side. As a Realtor, you have to keep working, keep training, keep informed of what’s happening in your market, and be the expert. None of these things will happen if you go into groundhog mode.
With the end of the calendar year approaching, there have been several signs (almost trends) that are encouraging. Number one is our supply of Bluegrass homes. The peak supply this year was lower than last year, and we have seen a steady decline in the number of homes on the market. While the supply is still almost double where we would like it to be, the trend is encouraging. Secondly, we have had several months in a row where we have outperformed the previous year in both closed sales and pending sales. Overall, we will finish this year with numbers very close to last year, but again the trend is encouraging.
Dusting off the crystal ball, I see more of the same for next year. Gradual improvements should continue, but the market will continue to be held back from full recovery mode by restrictive lending practices and the oversupply of foreclosures, bank owned properties, and short sales. Our marathon will continue, but with training and focus, we will eventually cross that finish line, and we will all be stronger for enduring the race.
