Following a fire last year that left Jennifer Foster and an adult child displaced from their Radcliff residence, she looked to purchase a home to improve her family’s circumstances.
What she found was that even with approved financing, the local housing market was severely lacking homes in her price range.
“What I found was very few were selling and what I did find were not affordable,” she said. “They were out of my price range.”
Prior to the fire, Foster had been living in a mobile home. Moving from a mobile home into a single family residence was a dream for her, and now with a new job and increased wages, she was ready to make the next step toward owning a home.
“I just wanted to provide a home for my son and me, even just temporary, while we tried to get adjusted and there was just nothing,” she said. “It’s heartbreaking to know – Christian is special needs – and I am not able to do my job to take care of him. It’s not where I wanted to be.”
According to Realtor Kevin Clark, Foster is not alone in Hardin County as the market is lacking inventory, especially homes costing less than $150,000, which was Foster’s budget.
“The biggest trend we see right now, more than anything, is low inventory,” he said. “We probably have more real estate agents than we do actual listings at this point in time. The lag is in the first-time home owners area, $180,000, $150,000 and below. There’s just not a whole lot out there to try and get folks into a house.”
Foster eventually gave up her search and opted for a manufactured home. She hopes to be in it in a month or two.
Clark said he’s had clients who have postponed their search until the market has more selection.
“I’ve had two buyers recently who decided we’re going to wait six months to a year before we look again,” he said. “They are going to continue to rent until the market clears up again. It’s tricky situation right now. It’s clogged up at the lowest level and that really hurts the rental side because the availability of rental properties is limited right now, too.”
Foster said that was what she found while trying to find temporary housing until she was able to find a house.
“[Leasing agencies and Realtors] were like, ‘Nobody’s renting right now, You’re not going to find anything in your price range. I’m sorry, but it’s just a buyer’s market. Because of COVID people just aren’t selling,’” she said she was told.
Although Clark thinks the pandemic might be compounding problem, he doesn’t believe it’s the only reason for low inventory.
“I think COVID plays into it as the job loss and people not thinking they can afford a house right now,” he said. “I don’t think it’s affecting the market. The market’s strong. With interest rates where it is, demand is going to continue to be strong. Inventory is going to continue to be low just because of where we are with the builders and being able to do anything with the cost of that.”
Clark also said a movement of people from the Louisville area looking to reside in Hardin County has created the jam.
“We’ve seen a trend recently where we’re getting a lot of movement from Louisville and the bigger cities to move out to where it’s quieter, where things go a little slower, that country living that everybody’s got in their minds,” he said. “The bigger cities have caused some movement from them to our rural areas, because that 45-minute drive is not that bad if you’ve got a couple acres and it’s quiet and you don’t have to worry about what’s going on in the bigger cities.”
Another factor is the movement of 600 troops and their families to Fort Knox with V Corps.
In a recorded video delivered Feb. 4 to the Knox Regional Development Alliance, Maj. Gen. John Evans Jr., commanding general of U.S. Army Cadet Command and Fort Knox, said the local housing market is “saturated” with 24 percent fewer rental properties.
“In once sense this is good news,” he said.
However, 45 percent of soldiers live outside the military housing area, which is defined by living 20 miles or less or a total commute time of less than one hour, Evans said.
“As the Fort Knox commanding general, I’m not telling anyone they must build more homes or rental properties, but I am asking that the right players come together to see how demand could be better met,” he said. “Whether you’re a soldier that works on post or a employee who works at a local box store, commutes over an hour isn’t ideal for anyone, especially from a quality of life standpoint.”
Evans suggested his garrison team would like to be part of any discussions to find solutions saying that the need is here.
Another factor to consider is the Hardin County area recently was ranked nationally to have higher levels of unaffordable housing, underwater mortgages (more money is owed on a home than it’s worth). and foreclosure activity, according to a recent study by Attom Data Solutions.
According to the study, 32.8 of mortgages were underwater and one in 1,032 residential properties was facing possible foreclosure in Hardin County in the third quarter of 2020.
Although the data sounds alarming, Abound Credit Union President and CEO Ray Springsteen says a few factors may be contributing to this statistic.
“A couple things could have potentially impacted that,” he said. “One is loan deferrals. So us, and certainly lots of other financial institutions in the community, were looking for ways to make sure we’re supporting members of the community by deferring loans when there was any challenge they may be facing. You could see that there is a decent amount of consumers that could have had a three-month or six-month loan deferral, meaning their loan balance would not have paid down as fast.”
Another factor is loan types, Springsteen said.
“Us and other financial institutions are more willing to do loans that are not the standard 20 percent down payment,” he said. “We will do a loan that will have a lower down payment, because we tend to portfolio more of our loans. So that also could have an influence in that there are lower down payments to begin with, so that also could have an influence on the data.”
A third factor, according to Springsteen are home values.
“While values in our community grow at a much different pace than say Denver or New York City or Washington D.C. or San Fransisco, that’s going to have some influence there potentially,” he said.
And at face value, while the statistics do sound alarming, Springsteen said he is looking at all the data that contributed to this finding before forming judgment, including the moratorium in the state placed on foreclosures and evictions at the height of the pandemic.
“When I see the community listed in a negative way on a piece of data, I want to make sure we understand it,” he said. “I don’t think we were initially alarmed. We recognize it as likely a factor to deferral, potential loan types, even say, and this is about underwater mortgages but there’s also a point made about foreclosures and the increases in foreclosures.
“There were a moratorium on foreclosures for a while and that would have had an impact on a greater amount toward the end of the year than at the other points in the year,” he said. “So that is kind of where we were coming from. I think it’s important information and we want to take it seriously, but that’s what we are seeing so far.”
Springsteen said while there may be some families facing foreclosure, he doesn’t believe the data is as dire as it suggests saying many have worked out solutions with their mortgage lenders.
“I’m not discounting it, but I also recognize 2020 was obviously a very crazy year, so when you layer on the odd amount of loan deferrals us and others were doing, that has an influence on that data,” he said. “You’re paying on a mass scale, mortgages are being paid down slower because we are allowing mortgages not to happen for three months or six months. Does that mean that anyone is in danger of foreclosure. No, I don’t think it does, not to this degree. That’s a stat we’ll obviously have to watch.”
Springsteen said although inventory may be low, there are some positives to the local market.
“One of the things I like about where the community is at right now is because of the influence of Fort Knox, the work that the community has done to make sure we’re bringing in new business and new missions, has really helped us to be successful even as we’re going through nationally some economic challenges,” he said. “The influence of Fort Knox will have resulted in $50 million in additional payroll annually because of V Corps and 75 new jobs were brought in because of a new contract; another $4 million in payroll. Those are great things for our community and something to feel good about for the future.”