The Louisville real estate market is facing a severe uphill climb. John Locke’s brainchild has one portion securely in place — demand — but the supply side is almost nowhere to be found.
Residential real estate options for buyers have dwindled to an all-time low. During the last 12 months, our absorption rate has been below three months, where a six-month supply would be considered “balanced.”
For February 2017, this metric dropped to an abysmal two months. Clearly, our market desperately needs more listings. And not just a few more… a full-blown, metric ton more!
Just one year ago, Louisville averaged 2,603 active listings for the month of February. Fast forward one year and that number plummeted 23 percent to just 1,998 homes listed, according to the Greater Louisville Association of Realtor’s MLS database.
Simply move back to February 2014 and we were looking at 5,736 listings. It’s easy to see that our market is unbalanced and the only remedy is more, new listings.
Despite this mile-high hurdle, the Louisville market is doing its darndest to stay active. In February there were 747 properties sold, this down just about 7 percent from the previous year.
For the most part, we can see that the difference is found in the lowest price tiers. Homes under $70,000 dropped from 175 units sold to just 143. When we look above $70,000, we find that 8.2 percent more properties exchanged hands.
Now, let’s take a look at Louisville home prices.
The median sales price for February 2017 was $155,000. One year ago this value was $139,900. Comparing our 12-month averages we see Louisville home sale prices increase by almost 7 percent during the past year, far above our historical average appreciation of 4 percent.
With fewer homes to choose from, competition is increased and buyers must pay more. Great for sellers, just not so much for home buyers. Good thing interest rates are still quite low.
Given current market forces, now is an incredible time for Louisville home sellers to list their properties.