Are you considering buying or selling a home in Lexington, Kentucky, in 2024? Understanding the Lexington housing market trends is crucial for making informed decisions. The Lexington housing market remains competitive, with homes selling quickly and often receiving multiple offers. While the market is still favoring sellers, we're starting to see some signs of a shift towards a more balanced environment. Let's dive into the details to paint a clearer picture of what you can expect.
Lexington Housing Market Trends in 2024: A Comprehensive Overview
Home Sales
The Lexington housing market saw a slight increase in the number of homes sold in October 2024 compared to the same time last year. According to Redfin data, there were 312 homes sold in October 2024, representing a 6.8% year-over-year increase from the 292 homes sold in October 2023. This indicates that despite some cooling in the market, there is still a steady level of buying activity in Lexington. Many buyers remain eager to enter the market, particularly those who are relocating to the area or seeking to upgrade their living situations.
However, it's important to note that this increase in sales is relatively modest. The pace of sales has been slowing down. This suggests that the previous surge in activity has somewhat settled, and we're now experiencing a more typical market, although still slightly competitive.
Home Prices
While the number of homes sold has increased, the pace of home price appreciation has slowed. The median sale price of a home in Lexington in October 2024 was $331,000, a 1.7% increase year-over-year. Although prices are still rising, the rate of increase has definitely slowed down compared to the past few years. I've noticed that sellers are becoming more realistic with their pricing expectations, which has helped to stabilize the market.
Another noteworthy trend is that the median sale price per square foot in Lexington has gone up significantly. In October 2024, it was $187, a 7.5% increase year-over-year. This suggests that buyers are willing to pay more per square foot for homes in desirable neighborhoods and for homes with updated features.
Housing Supply
The inventory of homes for sale in Lexington is still relatively tight, but I've noticed a slight improvement compared to the very low inventory we saw in the past couple of years. Though not back to pre-pandemic levels, it's a positive sign for buyers. While the number of homes for sale hasn't dramatically increased, the combination of a slight slowdown in demand and a slight increase in supply has helped to create a less frenetic market.
Market Trends
Several key trends are shaping the Lexington housing market in 2024.
- Slowing Home Price Growth: As discussed earlier, home price appreciation has slowed down, offering buyers a little more breathing room in terms of affordability.
- Increased Days on Market: The median days on market have increased to 35 days, a significant change from the 26 days it took to sell a home the previous year. This means that homes are staying on the market for longer, which is beneficial to buyers.
- Slight Increase in Inventory: The housing supply is still limited, but it's slowly increasing, giving buyers more options to choose from.
- Shift towards a More Balanced Market: While the market remains competitive, it is slowly shifting towards a more balanced environment, with less pressure on buyers to make quick offers and waive contingencies.
Is Lexington a Buyer's or Seller's Housing Market?
Currently, the Lexington housing market is transitioning from a seller's market to a more balanced one. While sellers still hold an advantage, buyers have more negotiating power than they did a year ago.
I've observed that buyers are no longer feeling as much pressure to make rushed decisions or waive inspections. They're having more time to consider their options, make informed decisions, and potentially negotiate on price. This is a positive development for buyers who have been facing significant challenges in the past couple of years.
Are Home Prices Dropping?
Home prices are not dropping significantly in Lexington, but the rate of increase has definitely slowed down. The current market shows a more moderate rise in prices, and I expect this trend to continue for the rest of the year. However, it's important to remember that the housing market is dynamic, and economic conditions, interest rates, and other factors can impact prices.
Here's a summary of the Lexington Housing Market in 2024:
| Metric | October 2024 | Year-over-year Change | Market Implication |
|---|---|---|---|
| Median Sale Price | $331,000 | +1.7% | Slowing price growth, still favorable for sellers |
| Homes Sold | 312 | +6.8% | Steady sales activity, but pace is slowing down |
| Days on Market | 35 | +9 | More time for buyers to consider offers |
| Sale-to-List Price | 97.9% | -0.58% | Homes selling closer to list price, but still competitive |
| Housing Supply | Tight, but improving | More options for buyers | |
| Market Condition | Shifting to balanced | Buyers have more negotiating power |
Lexington Migration and Relocation Trends
I've also noticed that Lexington is attracting people from other parts of the country. The Redfin data shows that, during the period of August to October 2024, 33% of Lexington homebuyers searched to move out of Lexington, while 67% looked to stay within the metropolitan area. This suggests that many people are drawn to Lexington due to its relatively affordable housing market, strong economy, and high quality of life.
From a relocation perspective, Lexington is attracting people primarily from Louisville, Chicago, and Los Angeles. People who are looking to move out of Lexington are primarily choosing Cincinnati, Danville, and London as their destinations.
Is Lexington KY an Expensive Place to Live?
Cost of Living
Compared to other major cities, Lexington remains relatively affordable. However, its cost of living is higher than some other areas in Kentucky. Moving Waldo highlights that utility and overall living costs are comparable to other cities within the state. RentCafe notes that the cost of living in Lexington is about 1% lower than the national average, making it more affordable than many other metropolitan areas.
Comparison with Other Cities
| City | Cost of Living |
|---|---|
| Lexington, KY | 1% lower than national average |
| Hebron Estates | Higher than Lexington |
| Louisville, KY | Comparable to Lexington |
My Thoughts:
As someone who has been involved in the real estate market for many years, I've observed the changes occurring in 2024. The market is clearly not as fast-paced as it was in 2022 and 2023, which is good for both buyers and sellers. I believe that the current trend toward a more balanced market will continue for the foreseeable future. However, I'm also aware that interest rates, economic conditions, and local factors can impact the market unexpectedly.
Lexington Housing Market Forecast 2024-2025
The Lexington-Fayette, KY housing market has been on a steady rise in recent years. But what does the crystal ball hold for the rest of 2024 and beyond? Let's delve into a forecast based on available data and analyze if a crash or a boom is more likely.
The Lexington housing market forecast suggests that we could see moderate growth in the coming months. Zillow's latest forecast indicates a projected 3.1% increase in home values by October 2025. So, the answer is no, it is not expected to crash and the overall outlook is pretty positive. However, it's important to understand the nuances of this prediction and how it relates to the wider Kentucky market.
Forecast for Lexington Home Prices
The data from Zillow provides a valuable snapshot of what we might anticipate. Let's break down their projections for the coming year.
Here's what we see from their Home Value Forecast:
| City | Forecast Date | Projected Home Value Growth |
|---|---|---|
| Lexington, KY | November 2024 | 0.1% |
| Lexington, KY | January 2025 | 0.4% |
| Lexington, KY | October 2025 | 3.1% |
As you can see, the projected home value growth is slow and steady. The 3.1% growth figure by October 2025 is a positive sign but not overly exuberant. This points to a market that's stabilizing after a period of rapid appreciation, and suggests a more balanced environment for both buyers and sellers.
Lexington vs. Other Kentucky Regions
It's interesting to compare Lexington's housing market forecast with other parts of Kentucky. Some regions are projecting even faster growth while others are seeing more modest increases.
For example, Elizabethtown projects the highest growth at 3.7% by October 2025. This suggests that other markets in Kentucky may be heating up more rapidly than Lexington.
Other regions are forecasted to grow at the following rate by October 2025:
- Louisville: 1.8%
- Bowling Green: 2.8%
- London: 1.8%
- Owensboro: 2.5%
- Richmond: 3.1%
- Paducah: 1.8%
Will Lexington Home Prices Drop in 2026? My Perspective
In my opinion, the Lexington housing market will likely continue on a path of gradual growth in 2026. It is unlikely to experience a major price drop or crash. The area is attractive due to its thriving job market, strong economy, and a high quality of life. However, as we see the interest rates rising and cooling off, there may be some slower growth.
It is always difficult to predict the future with absolute certainty, however, based on my expertise and the available data, I expect the Lexington housing market to remain healthy in the near future.
My Conclusion
The Lexington housing market forecast for the coming year suggests a period of stability and moderate growth. While the projected home value increase is not dramatic, it is a positive indicator for a healthy market. The market might cool down slightly, but an outright crash is unlikely. If you are a buyer or seller in the Lexington market, it's vital to keep yourself informed and work with a local real estate professional who can guide you through the process.
