LEXINGTON, Ky. (LEX 18) — It's an issue none of us can escape. Whether it's filling up your car or buying food, inflation is a driving force that's hitting all of our wallets.
It might play out in ways you're not thinking about. Just ask anyone who's trying to buy a home right now.
At Tuscany Development in Hamburg, a home under construction had its asking price jump 16.5% in the span of a week. A quick survey of Lexington homes currently priced at $250K have increased an average of 3% in value in just two months.
So, expect to pay more, and if you want that house, you'd better hurry.
Remember the days of chasing that American dream? Spending a weekend touring a few homes and then taking your time comparing notes and deciding which one you might want to buy?
"You know, you get a list of houses on Friday, we'll meet Saturday, we'll go have lunch, let me know after the weekend what you might want to do – those days are gone!" said John Groft. "You have low interest rates, you have low inventory, you have a ton of buyers who want to take advantage of the market – it's just a perfect storm."
Groft, and his business partner, Nika Trowbridge, report record sales. A 6% increase in business last year after a 6% bump from the year before.
"I've been working with relocation clients the past couple of years and that's all that they keep saying is that 'Is it always like this?' and I'm like 'It's been like this for a couple of years; just this past year, it's been the heaviest," Trowbridge said.
What's driving all of this?
For one, mortgage rates – while slightly up – remain extremely low. An aging population looking to move and downsize. But, it's the millennials who are stirring the pot.
"They are serious buyers and we need to embrace them and they really have decided to create families and look for homes now. It is our biggest segment; it's probably over 30%."
If you're a seller, it's a beautiful thing.
Jesse Lokovich is one of several people we spoke to who tell us they received multiple offers – for above asking price – within days of listing their home.
"It ended up selling in a day and a half," said Lokovich. "We're still going through the selling process but had people from 9:00 a.m. all the way through 9:00 p.m. come look at the house all throughout the day."
But extra money made usually means extra money to be paid when you buy your next home. And that's where this gets tricky.
"A lot of the market now is accepting offers well above the list price," said Groft. "So, we can't come and look at the level you've been approved for. We have to back off, match up what features you're looking for, and then add to the price to win the deal hopefully."
And that has kept lenders hopping.
Loan officer Hannah O'Nan has been on the run since her office opened in Lexington 18 months ago.
"People say these rates are high. These rates are still crazy low," said O'Nan. "If I went to my parents and said someone is complaining about a 4% interest rate, they would say 'I had a 16% interest rate.'"
So what can you do? Find a real estate agent to negotiate on your behalf. Talk with a lending company immediately to find out how much home you can afford. And have all of your buying paperwork in order before you start touring homes.
In many cases, the house you see tomorrow morning might already be spoken for by sundown.
"If you're just wanting to put your toe in the water, it's not going to work for you because it's going to get by you so quick," said Groft. "Or if you get emotionally attached to a home we talk about, we go to show a house and it's already pending before we get there. So when we walk into a home, we have to mentally get the boxes checked off that this house is ours and act quickly."
