I think it will be like 2008. Don’t panic though. Next year shouldn’t be like the 2009 market.

In 2008, we were starting to feel the market slow down. It peaked in 2005 just as it did a couple years ago. We were all in denial back then, hoping what we were seeing in California and Arizona would not come here. It did, but not as severe. The Lexington/Bluegrass market has always been pretty stable and resiliant.

So, by 2008 we were seeing a lot of price reductions. A lot of rising inventory. Only the best houses were selling fast. A seller had to do some prep work to make their house stand out. Many sellers were in denial because they had bought in a frenzy. They were shocked not to have a line of buyers wanting their house the first day on the market. Being a realtor began to be a real job that required skills where you really need to know the market, know how to negotiate, and know how to present a house so it stands out among all the competing listings.

I would normally use this paragraph to contrast 2008 to the current market. Since it is identical, just go back up there and substitute 2026 where I wrote 2008.

Don’t worry though. There are no signs of a coming crash. This slow down is driven by lack of demand due to affordability. Back then, the market crashed due to bad mortgages causing forclosures.

I think the rest of this year will see little appreciation, frustrated sellers, cautious buyers and a lot of realtors getting out of the business.