This home at 2307 Jefferson St. was for sale in May when the photo was taken. It has since sold, just as 601 other homes sold so far this year that were listed with real estate agents represented by the Paducah Board of Realtors. The home’s listing agent in this photo is Kevin Housman, formerly with Fern Leaf Real Estate, who is now at Century 21. (Adam Shull | The Sun)
“2012 was a lot better than previous years,” said Donnie McKinney, a commercial real estate agent with Coldwell Banker.
“For a couple years after the real estate bubble burst there was almost no activity. Nobody could get cash from the banks, and you just couldn’t get deals going. But 2012 has been pretty active.”
In 2012, 26 industrial or commercial sites sold in McCracken County, up from 17 in 2011, according to numbers from the Western Kentucky Multiple Listing Service. The 26 sites sold for more than $16.7 million combined compared to $6.6 million for the 17 sold in 2011.
“As far as 2013, I can only repeat what some national organizations have been reporting,” McKinney said.
“There’s some pent up demand (locally). It’s a lot of money out there looking for a place to be.”
David Nelson, another commercial real estate agent for Coldwell Banker, said he’s excited about the activity heading into 2013 after deals were at a near standstill in previous years. “I think a lot of this enthusiasm may be coming from the new school, real estate out by the mall has really picked up,” Nelson said.
Similar positive vibes are coming from slightly improved sales this year in the residential real estate market.
More local homes sold this year through November than compared to the same time period in 2011, according to numbers from the Paducah Board of Realtors.
From Jan. 1, 2011, to Nov. 30, 2011, 557 residential listings sold at an average price of $143,009.
In those same months this year, sales rose to 602 listings at an average price of $148,471. Homes with each number of bedrooms, from one to five or more, saw a modest uptick in sales, and homes that sold this year spent 147 days on the market on average compared to 159 in 2011. The numbers reflect homes listed with real estate agents registered with the Paducah Board of Realtors.
Positive home sale figures, such as these, aren’t shocking given Kentucky’s favorable position in a still sluggish national housing market suffering from the 2008 financial crisis fallout.
Through the first quarter of 2012, 10.2 percent of mortgages in Kentucky were considered underwater, a term for when a homeowner owes more than the home’s value.
Kentucky’s percentage of underwater mortgages is less than every state in the Southeast, and lower than neighboring states Illinois (28 percent, mostly due to properties in Chicago), Missouri (15.3 percent), and Tennessee (16.2 percent), according to the Federal Reserve Bank of St. Louis.
Regardless of strong home-sale figures in certain regions, debacles in other large real-estate markets lead to confusing reports about just how well homes are selling throughout the country, said Julie Stackhouse, senior vice president and managing officer of the Federal Reserve Bank of St. Louis.
Stackhouse, when speaking at Murray State University in early December, said Nevada, Florida and California lead the way for states with housing market conditions labeled as disasters.
According to Stackhouse:
—Nevada’s percentage of underwater mortgages, 61.2 percent, is so high, and foreclosure procedures so arduous, that homes are being sold above asking price because of the lack of available properties in good financial standing.
—States such as Florida, which has 45.1 percent of mortgages underwater, have a judicial foreclosure process that typically takes longer to move through. That’s one reason for a backlog of delinquent mortgages in some areas of the country, though, Stackhouse said she expects that backlog to be reduced in 2013.
The St. Louis Federal Reserve Bank has consistently reported for the past several years that conservative lending and prudent banking practices helped the commonwealth, particularly western Kentucky, thrive through the worst of the recession.
The ratio of commercial real estate loans to total loans — a measure of risk — has been lower for local banks than the national average and lower than the average for banks in the Fed’s Eighth District, which includes eight counties in western Kentucky and southern Illinois.
But one lingering factor on a national scale clouds the future of bank mortgage lending that will probably only fuel the mixed reports on home sales in 2013, Stackhouse said.
Fannie Mae and Freddie Mac underwrite 98 percent of the loans in the U.S., and both were at the forefront of the loan crisis in 2008.
These government-sponsored enterprises were put into government conservatorship on Sept. 7, 2008, and the U.S. Treasury has spent $187.5 billion to cover the companies’ losses, Stackhouse said.
Stackhouse said no clear plan is set on how to bring those companies out of conservatorship, a relationship that in part allows for today’s record-low interest rates.
Contact Adam Shull, journal editor at 270-575-8653 or follow @adamshull on Twitter.
Residential listings sold in 2011
—1 Bedroom: 3
—2 BR: 81
—3 BR: 327
—4 BR: 124
—5 BR or more: 22
—Total sold: 557
—Average sold price: $143,009
—Average list price: $151,865
—Average days on market: 159
Residential listings sold in 2012
—1 Bedroom: 5
—2 BR: 91
—3 BR: 336
—4 BR: 142
—5 BR or more: 28
—Total sold: 602
—Average sold price: $148,471
—Average list price: $158,219
—Average days on market: 147
Source: Paducah Board of Realtors
