Kentucky REALTOR® News
Kentucky REALTORS® (KYR) President Rip Phillips announces that KYR has joined the National Association of Realtors® amicus brief in defense of the Department of Labor’s (DOL) Association Health Plan rule. Amicus briefs are legal documents filed in appellate court cases by non-litigants that have a strong interest in the subject matter in question. Earlier this year, a federal court ruled that provisions of the DOL’s rule were unlawful, a ruling adversely impacting Realtors® seeking more cost-effective and comprehensive health insurance solutions through AHP options.
“Passage of the Patient Protection and Affordable Care Act resulted in significant regulatory changes to the individual insurance market, some of which have benefited Realtors®,” the brief reads. “However, ACA changes have also resulted in significant increases in health care costs, leaving many individuals to forgo coverage, which jeopardizes the health, safety and financial stability of their families and others.”
Kentucky REALTORS®, along with a number of other state and local associations, has agreed to join NAR in protecting AHPs, which has been the subject of litigation since shortly after the rule was finalized in June of last year. Others participating in the amicus brief include five state and local associations that are currently offering AHPs to members, including the Baldwin County Association of Realtors® in Alabama, the Greater Las Vegas Association of Realtors®, the Kansas City Regional Association of Realtors®, the Nevada Realtors®, and the Tennessee Realtors®.
To date, over 3,000 Realtors® and their families have found cost-effective health insurance solutions through these five association health plans. Many more Realtor® associations are also exploring AHP options but have been delayed due to the uncertainty surrounding this litigation. “The independent contractors of Kentucky deserve the option of Association Health Plans,” said Kentucky REALTORS® President, Rip Phillips. “The lack of insurance coverage options should not be a barrier to entering the real estate industry. While the recent court action has postponed our efforts to create another health insurance option for our members, we are grateful to the Kentucky legislators who helped to pass HB396 during the 2019 General Session to conform state insurance laws to the federal ones which we hope will allow us to move ahead”, he said.
“Supporting the Department of Labor’s rulemaking will continue to help safeguard our members’ ability to join an association health plan. Ensuring the freedom to choose quality coverage is key to cultivating a deep participant pool and strong marketplace, and Kentucky REALTORS® will continue to support the DOL’s efforts to expand these options in Kentucky and across the nation.”
NAR’s amicus brief discusses DOL’s lawful authority to expand access to AHPs by interpreting the working owner provisions to promote flexibility while not conflicting with existing statutes. NAR also describes the comprehensiveness of AHP coverage and the many successful plans already in place that is resulting in significant savings and benefits to many working owners. If the courts final ruling is adverse and pending any appeals, independent contractors may lose the ability to access insurance coverage through an AHP, sacrificing valuable savings on premiums, and broader network access with more comprehensive benefits.
“While NAR continues to explore and tackle barriers to a national AHP insurance option, we are learning from the many successes being implemented by state and local Realtor® associations,” NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota, said. “These initial programs are helping us ensure our members and their families can secure these effective, affordable health insurance options moving forward. We must continue to protect the AHP options that so many Realtors® have come to rely on for coverage and so many more deserve access to.”
NAR is a founding member of the Coalition to Promote and Protect Association Health Plans, which also submitted an amicus brief in this case. NAR recently created an updated map showing the state-by-state regulatory environment as it applies to working owners, which also links to a detailed chart outlining specific actions by individual states.
The number of homes available for sale continues to slide in Kentucky. That figure sits at a near-record low of 3.5 months, which is the time it would take to sell off all listed homes if no others were added to the market. This fact hasn’t seemed to slow down sales just yet, however. April 2019 saw 4,581 homes sold which is up half a percent over April 2018’s figure of 4,552. Year-to-date, homes sold stands at 14,903 across Kentucky, a slight dip of half a percent.
Nationwide, pending home sales declined in April, a modest change from the growth seen a month before, according to the National Association of Realtors®. Only one of the four major regions – the Midwest – experienced growth, while the remaining three regions reported a drop in their respective contract activity. The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 1.5% to 104.3 in April, down from 105.9 in March. Year-over-year contract signings declined 2.0%, making this the 16th straight month of annual decreases.
Lawrence Yun, NAR chief economist, said the sales dip has yet to account for some of the more favorable trends toward homeownership, such as lower mortgage rates. "Though the latest monthly figure shows a mild decline in contract signings, mortgage applications, and consumer confidence have been steadily rising,” he said. “It’s inevitable for sales to turn higher in a few months."
April’s days-on-market figure fell nearly ten percent to 104 days, down from 115 days in April of last year. The year-to-date number is slightly higher at 113 days, which is a six percent drop over this time last year.
Rip Phillips, President of Kentucky REALTORS®, said that dwindling inventory continues to be the trend. “Kentucky needs to experience an increase in new construction.”, he said. “What can fuel this? We need the Commonwealth to continue putting in pro-business policies that help increase wages. We also need more affordable housing with programs such as first-time homebuyer tax credits being used in other states to meet the demand”.
While the median home price rose only a fraction in April to $136,053, it still bests last April ($136,019) to reach the all-time high for this month. This marks the fourth straight month of year-over-year gains in home prices for the Commonwealth.
As an advocate for businesses of all sizes for approximately three decades now, there has been one issue that has remained consistent for me to hear about from business owners across the board. It has been their concerns and difficulties in finding affordable health insurance coverage for themselves and their employees.
Over the decades, health care reform attempts have been plentiful, with solutions being sought at many levels. States and the federal government have made attempts to address a multitude of components and cost-drivers each have identified in their health care systems. Former Administrations and Congress have made efforts to fix our ailing system, but most of these have only added to the cost of health care in America. Health care, unfortunately, due to a complexity of factors, does not react or behave like other traditional markets or types of businesses.
REALTORS® are real estate professionals who are members of the local, state and National Association of REALTORS® (NAR). In Kentucky, more than 11,300 Realtors are members of the state association and involved in all aspects of real estate. Each is part of the 1.3 million members of NAR which is America’s largest trade association. The overwhelming majority of these individuals are not employees of realty offices, but independent contractors who operate autonomously from their affiliated real estate companies. Thus, for most of them, their business expenses and health insurance coverages are paid for out of their own pockets and not by their employers.
A longstanding method of gaining lower cost health insurance has been to leverage group buying power. The opportunity to spread insurance risk across a large pool of insureds through multi-employer plans offered through business or trade associations has worked to achieve reduced rates for many businesses who employ people for decades. Left out until only recently when new federal laws were adopted, however, were independent contractors. Just two years ago, these businesspeople have been given the ability through federal legislation to participate in association health plans (AHPs). Both federal and state governments jointly regulate AHPs, so before this could happen, each state had to conform its insurance laws to the federal law. During the 2019 General Assembly, we were in full support of actions taken by Kentucky’s Legislature to make this happen.
Multiple states across the country have successfully begun AHPs for their members through sponsoring associations. Despite all the progress, 12 states (including Kentucky) and the District of Columbia filed suit to stop the final rules of the Department of Labor on AHPs. A recent ruling of the U.S. District Court for the District of Columbia struck down provisions of the Department of Labor’s final rule clarifying the definition of “employer” (under ERISA for the purposes of establishing an AHP). The states argued the DOL exceeded its authority in issuing the rule, which would circumvent protections put in place by the Affordable Care Act. This action has had a chilling effect on insurers who have been working in states who have not yet had the chance to offer AHPs to independent contractors. As our association has worked with major insurers to evaluate the viability of implementing an AHP, these providers have put us on hold as a result of uncertainty regarding the court ruling and appeal process.
The National Association of REALTORS® supports the appeal of this ruling and has encouraged the Department of Justice to protect the AHP rule that would provide working owners of all types of businesses with new cost-effective health insurance plans.
While we wait for a decision on the court ruling, federal lawmakers are working another angle to solve the problem. In April, Senators Enzi (R-WY), Alexander (R-TN), and others introduced the “Association Health Plans Act of 2019.” The bill would codify the DOL rule, to protect the expansion of association health plans to small businesses and the self-employed.
The Kentucky REALTORS® and a host of other organizations who represent independent business people remain optimistic that these efforts will result in an outcome that would allow these hard-working Americans the freedom and flexibility to have another option for their health insurance and be able to choose a plan that best suits their needs.
Kentucky REALTORS® (KYR) announces that Jenny Dixon has been hired as the Education and Real Estate Industry Coordinator. Her first day with KYR will be May 6th. She brings with her a strong background in customer service and event coordination.
Jenny comes to KYR from Dean Dorton in Lexington, KY where she worked most recently as a Human Resources Specialist. In this role, she conducted reference checks and benefits orientations for new hires, maintained personnel records, and coordinated meetings. She also maintained the department’s budget and ran weekly productivity reports.
Jenny also previously worked as special events coordinator for Alltech in Nicholasville, KY, and as assistant Registrar for Sullivan University in Lexington. She received her Bachelor of Science in Business Administration and Marketing as well as a master’s degree in Human Resource Management.
“We are delighted to welcome Jenny to our team”, said Steve Stevens, Kentucky REALTORS® C.E.O. “She brings many talents and new energy that will benefit our organization greatly as we continue to expand our work to more areas of the real estate profession, as well as our continuing strong support of Realtor members.”
Jenny’s role at KYR will be to report to the Director of Education on Kentucky Realtor Institute-focused duties and to assist with allied industry collaborative projects and as coordinator for a new commercial real estate program.
Dropping inventory continues to be the main concern as the Kentucky housing market continues to hum along at a near-record pace. The first quarter of 2019 closed with 10,322 homes sold, down just one percent over the same period last year. Kentucky home sales in March were down less than a half-percent over March 2018 at 4,252.
Existing-home sales retreated in March, following February’s surge of sales, according to the National Association of Realtors®. Each of the four major U.S. regions saw a drop-off in sales, with the Midwest enduring the largest decline last month. Lawrence Yun, NAR’s chief economist, anticipated waning in the numbers for March. “It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is underperforming in relation to the strength in the jobs market. The impact of lower mortgage rates has not yet been fully realized.”
Both 2019 year-to-date and March housing inventory numbers fell about 3%. This inventory shortage continues to drive up the median sale price of residential units in Kentucky. March’s inventory currently stands at 3.65 months. Rising sale prices should eventually moderate the number of units sold and slowly boost inventory, but we are not seeing this happen yet.
March’s days on market number stands at 118 days, which is down slightly from 120 days in March of last year. The year-to-date number is slightly lower at 116 days, which is the lowest point in well over a decade.
Rip Phillips, President of Kentucky REALTORS®, said that despite early talk of a possible housing downturn in 2019, Kentucky is seeing no signs of flagging numbers. “GDP is up 3.2% as the U.S. economy grew at a faster pace than expected in the first quarter and posted its best growth to start a year in four years”, he said. “The numbers we are seeing statewide right now are indicating that we might see another near-record year like we did in 2018.”
The median home price rose only slightly in March to $132,913. This is up less than a half-percent over March 2018 which saw a median price of $132,367. That figure was the all-time high for March. Nationwide, the median existing-home price for all housing types in March was $259,400, up 3.8% from March 2018 ($249,800). March’s price increase marks the 85th straight month of year-over-year gains.
The Kentucky Real Estate Commission (KREC) announces a new online licensing process for all applicants for a real estate license. Applicants will now be able to apply and pay for their professional license through the KREC website https://krec.ky.gov/Pages/default.aspx.
“Our priority for the Public Protection Cabinet (PPC), which includes the Real Estate Commission, is to provide exceptional service to everyone who contacts our agencies,” said Secretary K. Gail Russell. “Our goal at KREC is to provide the most efficient business processes, including applications, which will benefit all customers.”
In addition, Secretary Russell states online licensing reduces staff time in processing applications and decreases turn-around time between application and issuance of a license.
Harold E. Corder, executive director of the Kentucky Real Estate Authority (KREA), reminds real estate license applicants that a national criminal background check is required by state law before taking the licensure examination.
“Our agency accepts national criminal background checks from two agencies, the Kentucky State Police (KSP) and the Federal Bureau of Investigation (FBI),” said Corder. “The price of a KSP report is $33.25 and has a one-to-two week turn-around time, depending on the time of the year. The price of an FBI report is $18 with an estimated one-week turn-around. KSP sends the report directly to the Commission and the FBI sends the report to the individual.” Both formats are accepted with online applications.
Besides applying for a license online, current licensees may utilize the online services portal to renew their license, update personal contact information, place a license into inactive status, verify a license, and view continuing education history and requirements. Principal brokers can also complete those functions, plus view and print licenses, accept or release a licensee, and view contact information.
Kentucky home sales in February soared six percent over the 2018 number. Units sold reached 3,323 which is the highest level since 2016 and sets a new record for February. With larger numbers of homes selling early in the year, rebounding inventory numbers will take a temporary hit.
Nationwide, existing-home sales also surged 11.8 percent which is the largest month-over-month gain since December 2015, according to the National Association of Realtors®. Lawrence Yun, NAR's chief economist, credited a number of aspects to the jump in February sales. "A powerful combination of lower mortgage rates, more inventory, rising income, and higher consumer confidence is driving the sales rebound."
While the February housing inventory mark was down 13% over last year at 4.7 months, the year-to-date average of 5.2 months is a more manageable figure and down only 3% over 2018. Rising sale prices may continue to moderate the number of units sold and slowly boost inventory as the year progresses into the spring buying season.
The days on market level for February fell a full 13% from an average of 130 days last year. Kentucky saw houses remain on the market in February 2019 for an average of 113 days.
Rip Phillips, President of Kentucky REALTORS®, said that the January slowdown and subsequent boost in inventory were short lived. “The fact remains that there is great demand for homes right now. A boost in inventory will likely meet with a spike in sales figures shortly thereafter”, he said. “The really great news is that the economy seems not only stable but strong. It’s a great time for investment in the housing sector since businesses are expanding and hiring causing unemployment to plummet.”
As in January, the median home price again rose by 7% in February. The figure topped out at an all-time high for February at $127,700. The 2018 figure last year was just over $119,500.
Kentucky home sales in January are down eight percent from January 2018. Units sold reached 2,747 which comes in 252 units shy of last year’s mark of 2,999. A near record year in 2018 home sales resulted in below average inventory and above average prices creating a market that proved to be difficult to sustain.
Nationwide, existing-home sales dropped just 1.2% in January, according to the National Association of Realtors®. Lawrence Yun, NAR’s chief economist, says January’s home sales of 4.94 million were the lowest since November 2015, but that he does not expect the numbers to decline further going forward. “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
While the January housing inventory mark was up only 5% over last year at 5.66 months, it is now double what it was just six months ago at its lowest 2018 level. The rebounding number continues to approach the six-month mark which is considered a comfortable standard by most economists.
The days on market level rose just 2%. January saw houses remain on the market for an average of 118 days, up from 116 one year ago.
Rip Phillips, President of Kentucky REALTORS®, said that a market correction was inevitable as the supply of homes dwindled throughout the latter half of last year. “There are areas in Kentucky where inventory became so strapped that it created a seller’s market which inflated home prices. This can price certain segments of potential home-buyers out of the market.” Phillips noted that a slowdown in sales will help bolster inventory. “Hopefully, prices will normalize and allow those looking to get into the market for the first time to find financing options that will meet their needs”, he said.
The median home price rose by 7% in January after falling for two consecutive months. January 2018 numbers topped out at $131,120 while the 2018 level was $122,495.
Kentucky REALTORS® (KYR) announces that Richard Wilson has been hired as the Director of Governmental Affairs. His first day with KYR will be January 21st. Richard brings with him a strong and impressive background in governmental affairs and advocacy.
Richard comes to KYR from Nashville, TN where he worked most recently as the Small Business Advocate for the Tennessee Comptroller of the Treasury. In this role, he was a liaison between the state’s small business community and the legislature, identifying issues to bring before the legislature to assist small businesses and improve the business climate. He successfully lobbied approximately 60 bills on behalf of the Comptroller during 2018.
Other positions held include Bill Clerk for the Tennessee Legislature where he handled bills for the Finance, Ways and Means Committee; Field Representative for the House Republican Caucus in TN; and roles with numerous state and federal campaigns in Tennessee and Mississippi.
“We are very pleased to have Richard joining KYR's Government Affairs Team,” said Steve Stevens, Kentucky REALTORS® C.E.O. “He has seasoned experience in advocacy and political action through his previous work in Tennessee and Mississippi and understands how to work closely with legislative members to articulate important policy needs of business. I know our members will enjoy working with him across the state as he supports their advocacy efforts.”
Richard’s primary responsibility at the Association will be to promote and defend homeownership and private property rights across the state. His wife is a native Lexingtonian and they both looking forward to settling into life in the Bluegrass.
Kentucky home sales in November are down just one-quarter of one percent from November 2017. Units sold topped out at 3,909 homes which is just 10 units shy of last years mark of 3,919. The 2018 housing market is almost as strong as last year’s record-breaking mark. 2018 numbers are down just 1.1% at 48,615 units sold compared to 2017’s tally of 49,167.
Nationwide, existing-home sales increased in November, according to the National Association of Realtors®, marking two consecutive months of increases. Unlike Kentucky, however, year-over-year numbers are down 7% from 2017. Lawrence Yun, NAR’s chief economist, says two consecutive months of increases is a welcomed sign for the market. “The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago. Rising inventory is clearly taming home price appreciation.”
Steve Cline, President of Kentucky REALTORS®, said that certain areas of the state have stronger than usual numbers and are causing the home sales tally to flirt with record territory. “While most area sales remain largely unchanged over last November, some areas are seeing record-breaking numbers of units being sold. Places like Greater Owensboro, Hardin County, the Bowling Green area, and particularly Ashland have seen their highest sales in over a decade. Ashland’s November numbers bested their high-water mark by an amazing 21%.”
The median home price fell by 6.3% in November after rising for three consecutive months, easing concerns that falling inventory might raise prices high enough to begin pricing some first-time home buyers out of the market. November 2018 numbers topped out at $129,200 while the 2017 level was $137,361.
While the November housing inventory was up slightly over last year at 4.73 months, the year-to-date inventory fell 2% to 4.2 months. Kentucky continues to have low inventory levels. Six months of inventory is considered to be a comfortable standard by most economists.
Days on market levels also dropped slightly in both year-over-year and year-to-date measurements. November saw houses on the market for an average of 107 days, down from 109 one year ago.