June 2019

Friday, June 28, 2019

If no more homes were placed on the market in Kentucky, it would take 3.1 months to sell everything in inventory at present. That figure is at the lowest point since it began being tracked by Kentucky REALTORS® in 2013. Economists say that a healthy housing market has about a 6-month inventory level. In the Commonwealth, supply just can’t keep up with the increasing demand. The unfortunate side-effect of this is rising prices.

President Trump signed an executive order this week establishing a White House Council on Eliminating Barriers to Affordable Housing Development. The council will consist of members from across 8 Federal agencies and will be chaired by Secretary of Housing and Urban Development (HUD) Ben Carson. It is reported that this new council will engage with State, local, and tribal leaders to identify and remove obstacles that impede the development of new affordable housing. It will also look at the effect Federal, State, and local regulations are having on the costs of developing affordable housing and the economy.

The National Association of Realtors (NAR) welcomed the news of the announcement and applauded the actions of the Administration.  In a release from NAR, 2019 President John Smaby said, “Today, despite historic economic growth and recovery, misguided regulations and gaps in new home constructions have stopped far too many Americans from purchasing a home. The National Association of Realtors® thanks President Trump for taking much-needed steps to address housing affordability in this country, and we look forward to continuing to work closely with the White House to ensure the American Dream remains attainable for all those who seek to become homeowners.” 

May 2019In Kentucky, May closings surged 5.6% to 5,346 homes, up from 5,064 in 2018, marking the second-highest May on record. Year-to-date closings are also just off the pace of the 2017 record high year. So far in 2019, 20,295 homes have sold, up from 20,046 at this time last year.

Lawrence Yun, NAR chief economist, said lower-than-usual mortgage rates have led to a nationwide increase in pending home sales for May. “Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in at these rates.” Yun said consumer confidence about home buying has risen, and he expects even more activity in the coming months. “The Federal Reserve may cut interest rates one more time this year, but there is no guarantee mortgage rates will fall from these already historically low points,” he said. “Job creation and a rise in inventory will nonetheless drive more buyers to enter the market.”

May’s days-on-market figure rose ten percent to 110 days, up from 100 days in May of last year. The year-to-date number is slightly higher at 113 days, which is a three percent drop over this time last year.

May 2019 YTDRip Phillips, 2019 President of Kentucky REALTORS®, says that the rising demand is actually having an effect on the real estate industry. “Increasing numbers of individuals are seeking to get licensed in Kentucky”, he said. “Economists look at job creation as the mark of a strong economy. Conversely, when the economy strengthens the housing market, it leads to job creation in those related positions. That’s good news for the industry responsible for 15% of Kentucky’s gross state product.”

The ever-increasing demand for homes is still driving prices upward. The median home price rose almost five percent to $140,813, up from $133,923 in May of 2018. This is second only to June of last year when the median closing price reached $144,581).

Wednesday, June 19, 2019
 Rip Phillips, 2019 KYR President
Rip Phillips, 2019 KYR President

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.