“And down to the wire … they’re neck and neck … it’s a photo finish! Everyone please hold your tickets.”
Surprisingly, I’m not talking Derby, but rather Louisville home sales. The April numbers are in and it appears 2016 sales beat the previous year by a nose. Last April, there were 962 homes sold in Jefferson County. This year, we had 965 properties trade hands.
That’s a win by the narrowest of margins.
Looking at data year-to-date, there have been 218 more homes sold this year. That’s a 7.1 percent increase even as things slowed a bit in April.
The major story continues to be inventory.
While 1,569 new listings were added in April, according to the Greater Louisville Association of Realtors database, this is down 5.4 percent from last year. As you can see in this chart (at right), our absorption rate continues to be dangerously low.
Home buyers are ready to purchase, as is evidenced by Louisville’s dropping days on market (DoM) number. But will there be enough new housing inventory for our sales to continue at this frantic pace? That remains to be seen.
Now let’s take a look a home prices.
You would think with buyers fighting over new listings like a new version of an iPhone, home prices would actually be rising more quickly than they currently are. Of course, appraisers do play a role, but it’s clear Louisville real estate is in greater demand now than it has been in quite some time.
In March, the median home sale price in Jefferson County was $148,950. For April, that number rose to $150,100. Compared to April 2015, this year’s number is 5.7 percent higher. For a city who’s average yearly appreciation is around 4 percent, values are zooming!
(This number is further confirmed by comparing the trend-line values for April 2015 and April 2016, which produces a 5.6 percent increase.)
This year appears to be a somewhat pivotal year for real estate as the two sides of the equation are at odds. Will sellers continue to remain on the sidelines? Or will buyers simply decide not to buy and instead take advantage of the dropping rental rates?
Interest rates are slowly increasing but are still at historical lows. Since the beginning of 2015, the Louisville unemployment rate has remained steady around 5 percent, not the dangerous range it was in around 2011.
To be honest, it’s really a smart time to make a move in real estate. You can be sure, it definitely would not be like betting the long shot at Churchill Downs.