They say that the past can be a good predictor of the future, so before I make my 2013 predictions for the Louisville area housing market, let’s look back at our recent past:
As you can see, 8,706 homes SOLD in the Louisville area (this includes all of Jefferson County, as well as the counties of Bullitt, Spencer, Oldham, Henry and Shelby). The average sales price was $170,915. Days on market was 133, and the Ratio of List Price to Sales Price was 94.62.
There was a remarkable 34 % increase in number of homes SOLD in 2012 over 2011 – 11,608 homes SOLD. Days on market dropped just slightly – 128 days. Also noteworthy is the Ratio of List Price to Sales Price. This number rose to 96.89%.
Home prices also improved slightly: a little more than 2% increase over 2011 – to an average sales price of $174,443. Not a huge increase, but an increase nonetheless, and since we haven’t seen appreciation in our area since 2005, this Realtor is doing a happy dance!
Of course, these numbers include all prices in the entire Louisville metro area. When you research Oldham County, for instance, home prices actually fell slightly, down approximately $5,000 in 2012 as compared to 2011.
But overall, this is very good news.
What Can We Expect For The Louisville Market In 2013?
January is already off to a healthy start. From what buyers and sellers are telling me, they have been waiting for years to buy and sell, and they are tired of waiting. They are ready to make a move. And why not? There are still bargains out there, and mortgage interest rates are still at nearly all-time lows. And as landlords are raising rents, tenants are realizing they can now make a house payment that is lower than their rent payments. Unemployment rates are down slightly, hovering around 7.9%. Another positive indicator are housing starts, up from fourth quarter 2012.
Another key factor is inventory, down from over 8 months of inventory to 6.13 months of inventory. If inventory falls below 6 months, a long time buyer’s market could shift to a seller’s market. (This statistic reflects how many months it would take to sell out of inventory at the current month’s rate of sale.)
Not Quite Ready To Break Open The Champagne
While we have reasons to celebrate an improved housing market, there are still far too many families struggling with mortgages that are underwater. There remains a large inventory of short sales and foreclosures. Louisville has weathered the real estate storms of the past 7 years better than many areas of the country, but still faces some significant challenges. But I do believe we are headed in the right direction.
My predictions: Builders who either hung up their tool belt or survived these past few years by remodeling existing homes are going to have a renewed confidence to build spec homes. Many Realtors who put their licenses in escrow will get back into the workforce. And the real estate market, as it always does, will help drive the economy back on the road to recovery.
Overly optimistic? Maybe. But I do feel very confident that 2013 will be a much better year for home sales.
Remember: All Real Estate Is Local
If you would like to know the sales statistics for your county – even your specific area or subdivision, write me. I would be happy to look up that information for you.