National Association of Realtors (NAR) Chief Economist says all real estate is local, "no housing bubble in Kentucky" and it's a great time to buy
NAR Chief Economist Dr. Lawrence Yun addressed members of the Lexington-Bluegrass Association of Realtors, the Mortgage Bankers Association of the Bluegrass, the Home Builders Association of Lexington and other Central Kentucky community leaders on Friday, November 2nd at the Lexington Convention Center and said that there is no real estate crisis in Kentucky, that locally homes could be undervalued and that the real estate market will heat up in 2008 due to pent-up demand.
Yun emphasized that all real estate markets are local—and consumers are being led astray by national reports of stagnant real estate markets—most of which are in coastal regions. Additionally, most national news focuses on the lower volume of real estate transactions, the impact of the increase in subprime lending due to housing "bubbles" in other regions and not the locally stable value of real estate.
Yun illustrated the stability of the Lexington housing market by comparing Lexington's price growth to the price growth of homes in the Washington, D.C. area over the past 10 years and emphatically stated, "there is no housing bubble in Kentucky." He also pointed out that the mortgage obligation to income in Lexington is very affordable especially when compared with the mortgage obligation to income in San Diego—a high cost area that exemplifies most of the negative media reports on housing pumped out by the national media.
Using data from the U.S. Bureau of Labor Statistics, the U.S. Bureau of Economic Analysis, the New York Stock Exchange and NAR, Yun forecasts that there will be a healthier future for the real estate market at both the national and local level. Loans are shifting to traditional products as subprime
lenders are going belly up. Increasing jobs in affordable regions such as Central Kentucky will lead to a rise in home sales and cut backs in new home construction will thin out abundant inventory and strengthen home prices.
Yun summarized that often in so-called time of "crisis" it often turns out to have been a great time to buy. Currently, there is a wide selection of housing inventory and favorable mortgage rates. And, homeowners almost always come out ahead in building wealth—renters and investors who are looking for a short-term profit do not fare as well.
Lawrence Yun is Chief Economist and Vice President of Research at NAR. He writes regular columns on real estate market trends, creates NAR's forecasts and participates in many economic forecasting panels, including Blue Chip and the Harvard University Industrial Economist Council. Yun has been quoted on the real estate market and the economy in the mass media, including The Wall Street Journal, The New York Times and The Washington Post. He also appears regularly on CNBC and Bloomberg TV. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.
Editor's Note: Dr. Yun's full presentation (mp3 and pdf) and photos (jpegs) from the event can be downloaded by visiting www.lbar.com/public/pressroom.htm.
As the region's leading advocate for homeownership, Lexington-Bluegrass Association of Realtors (LBAR) understands the value and joy of owning a home. LBAR represents more than 2,500 Realtors located in Anderson, Bourbon, Boyle, Clark, Fayette, Franklin, Garrard, Harrison, Jessamine, Madison, Mercer, Montgomery, Scott and Woodford Counties. Visit www.lbar.com or call 859-276-3503 for buying and selling resources and real estate listings.
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