Kentucky Real Estate Market Outlook

Just as the Kentucky Derby is all set next year, not everything is poised to gallop at a horse’s pace in the Bluegrass State. Real estate prices are severely affected by the current economic crisis. Sales too are sluggish with what could be the worst property market scenario for the entire state. This could mean more bankruptcies for local homebuilders.

The Lexington home market is hinged on technology and government jobs. Home prices slightly rose but remained flat last year. Moreover, this trend is likely to continue in 2009 with a 10.5 percent drop in the middle of the year. The rising inventory needs to be repressed with better buyer participation.

Paducah in Western Kentucky is a different case. Kentucky’s micropolitan area stays in tow in the impressive run of its property market. Credit has been observed to be available to most borrowers. This is attributed to the robust home sales last year. RealtyOutlook.com forecasts a minimal 1 percent reduction in home values in 2009 after a relatively minor increase during the property market’s peak.

Unemployment persists in Bowling Green with 6.3 percent last December. The highest job cuts came from the automobile industry. Until the government gives in to the demands of the auto manufacturers for a bail out, more employees need to be afraid of their future. There are tough times ahead indeed. In fact, foreclosure rates are taking the market’s resilience. Prices are going to drop further by 11 percent.

Louisville is caught by a listless market that is evident in total home sales. Prices are on a free fall from a single-digit high during the boom. The result is a tighter credit market that sifts potential borrowers with stellar credit ratings from those with poor history. However, high-rise development in Jefferson County is going strong with an average unit priced at $400,000. This year though, home prices will