Thinking about buying a new home? How big should it be? Check out the attached article for some thought provoking questions to consider ... How Big a Home Do You Need?
It Remains an Excellent Time to Trade-UpA protracted inventory shortage continues to drive a very strong Spring seller's market for entry-level to mid-priced homes. Higher-end homes are moving more slowly and inventory is returning to historical levels. This makes it a great time to trade-up! Historically low mortgage rates are still providing an added affordability boost.
The Greater Louisville Association of Realtors President noted that, "The local market is still strong despite the fact that the current inventory of homes for sale is roughly 30% compared to 10 years ago. There is very strong competition for starter and move-up homes, and more normal levels of inventory for higher end homes." Overall Louisville area home inventory ticked up slightly in March to 3,475 active listings or a 2.3 month supply of homes. The average sale price of $211,000 was up 8% on continued limited inventory. The number of homes sold accelerated, while average days on the market remained steady.
Spring is a great time to sell! Here is a nice summary on why that can be a good idea ... 5 Reasons Why to Sell This Spring
Louisville is in a strong seller's market. Much like the rest of the nation. The attached Wall Street Journal article provides an excellent explanation on why this is happening.
A prolonged inventory shortage is driving an epic Spring seller's market for entry-level to mid-priced houses. Higher-end homes are moving more slowly and inventory is beginning to accumulate. This makes it a great time to trade-up! Historically low mortgage rates provide an added boost.
The Greater Louisville Association of Realtors President noted that, "The starter home market is still a hot sellers' market. Sales of mid-priced move-up homes are also strong, and the upper end of the market is more dependent on location and condition." Overall Louisville area home inventory dropped again in February to 3,350 active listings or a 2.2 month supply of homes. The average sale price of $205,000 was up 8% on continued limited inventory. Average days on the market, as well as the number of homes sold, were both flat on persistently short supply.
A Lack Of Inventory Greets The New Year
Louisville's home inventory dropped again in January to 3,475 active listings or a 2.3 month supply of homes. The average sale price of $215,000 was up 10% as competition for entry-level homes continued. Days on the market increased slightly to 65 days, and the number of homes sold was flat on persistent short supply.
The GLAR President commented that, "2017 turned out to be a year of continued low inventory for starter homes and normalizing conditions for mid-priced and higher end homes. We will likely see 30 year mortgage rates move towards 5%, but that should not have a big impact on affordability for buyers in the greater Louisville area."
Home ownership pays! Here's a nice example of how home equity grows ...
Inventory Drops at Year-end
Louisville's home inventory dropped along with the temperature in December to 3,850 active listings or a 2.5 month supply of homes. The average sale price of $217,000 was up 11% as competition for entry-level and mid-priced homes continued. Days on the market ticked up to 60 days, and the number of homes sold was down 3% on limited supply.
Greater Louisville Association of Realtors President Dave Parks commented that, "the inventory of starter homes remains low, but the inventory of mid and higher priced homes is beginning to return to historic levels." He also noted that, "interest rates have remained low this year, maintaining affordability for buyers in the area."
Why own a home? Check out the following article for five solid reasons ....
Inventory Advance Pauses
Louisville's steady increase in home inventory slowed in August on heavy buyer demand. Total home inventory remained unchanged at 4,425 active listings or a 2.9 month supply of homes. The average sale price of $215,000 was up 3% as competition for homes remained strong. Days on the market rose slightly to 51 days, and the number of homes sold rose by 7% on tight supply.
The Greater Louisville Association of Realtors President commented, "Our members continue to see a very strong seller's market this summer for starter and move-up homes. The pace of sales doesn't taper off until you get into the $400s and higher. Sales are only limited by the amount of inventory available to buyers."
From Louisville Business First ...Only 20 U.S. housing markets have bounced back strongly from the Great Recession of 2007-09 — and Louisville is ranked among them. The Louisville metropolitan statistical area shot up from 197.94 points in the first quarter of 2007 to 239.48 in the corresponding period this year, yielding a gain of 21.0 percent in the value of a typical home. Louisville's 10-year increase of 21 percent puts the market in 20th place. Roughly a third of the top 100 markets (37, to be precise) are still underwater, with average house prices that are lower today than before the recession.
The listing is live. The sign is up. What do you do next? Here is some excellent advice for home sellers from Inman News ...
Inventory is on the RiseInventory rose to a 2.7 month supply and the number of active listings grew to nearly 4,000 in May. The average sale price of $216,000 was up 6% as competition for homes continued. Days on the market held steady at 58 days. And, the number of homes sold increased by 6%.
The Greater Louisville Association of Realtors® (GLAR) reported sales up 4.7% year-to-date for 2017. With continued lower inventory, the average price YTD was up 8.6%. The inventory of available properties was 19% lower than last year.
GLAR President Allison Bartholomew commented, "Our members are still working in a very strong sellers' market for homes up to $400k. Between $400-600k the market becomes slightly more balanced and over $600k we're in a buyers' market in most areas due to the influx of new listings."
The NAR Chief Economist, said "buyers came back in force on "the expectation that delaying their home search may mean paying higher interest rates."
From the Greater Louisville Association of Realtors press release ...
The Greater Louisville Association of Realtors® (GLAR) reported sales up 4.67% year-to-date (YTD) for 2017. Sales totaled 3,608 for the first quarter versus 3,447 last year. With the continued lower inventory, the average price YTD was up 8.62% and the median price was up 6.55%.
For all MLS areas, the inventory of available properties was 19.14% lower than at the same time last year. In Jefferson County, the inventory of homes and condos for sale was also 21.52% lower than March 2016. Inventory in Oldham and Bullitt Counties was down 13.73% and 18.71%, respectively.
GLAR President Allison Bartholomew commented that, "Our members are still working in a very strong sellers' market for homes up to $400k. Between $400-600k the market becomes slightly more balanced and over $600k we're in a buyers' market in most areas due to the influx of new listings."
Has Louisville's Home Inventory Bottomed Out?
After dropping steadily since last July, Louisville's home supply held steady in March at a record low 2.5 month supply of homes. And, the number of homes listed for sale in March ticked up to 3,785 active listings. The average sale price was up nearly 10% as intense competition for many homes continued.
However, there is a growing mismatch between home inventory and buyer demand. Starter homes are selling like hotcakes as inventory is almost non-existent. Mid-priced home inventory is somewhat balanced; homes in good condition at this price point are selling briskly. Meanwhile, luxury homes are selling more slowly and inventory is beginning to accumulate.
Key March Data (vs. 2016)
Sellers: This is a great time to list! Extremely low inventory means less competition and higher prices. Please contact me for a complimentary market analysis on your home. Professional home staging and photographs are key and I provide both.
Buyers: Waiting to buy can be expensive as home prices and mortgage rates are rising. I have the experience and proven buying methods to help you find the right home! And, many sellers require a pre-approval letter before they will consider an offer. As a result, it is more important than ever to get pre-approved before you look. I have a great partner to help make that happen.
I love referrals! Please keep me in mind.
Lean home inventory is making the spring real estate market interesting as rising prices and interest rates pressure home affordability. Buyers are motivated and time on the market is dropping rapidly.
However, a growing inventory mismatch is adding complexity to the market as starter homes sell like hotcakes and luxury homes begin to accumulate. Additional inventory is the answer and single family home starts hit a 10-year high in February.
The following article from the Wall Street Journal provides a nice perspective ... Buying A Home This Spring Will Be Hardest In Years.
The Greater Louisville Association of Realtors® (GLAR) reported sales down 4.5% compared to February 2016. Sales totaled 1,054 this February versus 1,104 last year. Year-to-date (YTD) sales were down just 0.8%, coming off of a strong January. With the lower inventory, the average price YTD was up 8.1%. For all MLS areas, the inventory of available properties was 21% lower than at the same time last year.
GLAR President Allison Bartholomew commented that, "Multiple offer situations for starter and mid-level homes continue to be the norm. Many first time buyers, continue to make offers on more than one home before finding a seller to accept their offer. As was the case last month, homes in higher price ranges are selling at a more normal pace."
The National Association of Realtors'® (NAR) Chief Economist, Lawrence Yun, observed that "Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower and mid-market price range." With regard to new construction, the National Association of Home Builders (NAHB) now expects, "solid 10 percent growth in single-family construction in 2017, adding to the gains of 2016." NAHB Chief Economist Robert Dietz, also added that ongoing concerns include, "rising mortgage interest rates as well as a lack of (building) lots and access to labor."
The Greater Louisville Association of Realtors® (GLAR) reported January 2017 sales up 1.8% compared to January 2016. The average price was up 5.3%. For all MLS areas, the inventory of available properties was 20.3% lower than at the same time last year.
GLAR President Allison Bartholomew commented that, "The lack of inventory of starter and move-up homes continues to be the dominant story in the Louisville market. Many first-time buyers end up having to make offers on more than one home. At the same time, the pace of sales in higher price ranges is more normal. Rates have ticked up slightly, but affordability in Louisville is still very good relative to larger cities."
NAR President William E. Brown recently commented that, "The prospect of higher mortgage rates and more home shoppers in coming months should be enough of an incentive for those serious about buying to start their search now." He continued by saying, "There are fewer listings on the market, but also a little less competition than what's expected this spring. Buyers may find just the home they're looking for at a good price and without the possibility of having to outbid others."
Interest rates and home prices are both rising. Two excellent reasons to act now if you intend to buy a home this year.
An excellent perspective on the impact of interest rate increases from the Wall Street Journal: A Harsh Reality Is Hitting The Housing Market
From the Kentucky Association of Realtors ...
Total volume of all homes sold in Kentucky broke the $9 billion mark for the first time with $9.17 billion in sales. This surpasses the $8.21 billion sold in 2015.
"2016 was a unique year for real estate in Kentucky," stated Mike Becker, 2017 president of KAR. "Low inventory was an issue in just about every region of the state, but with low interest rates and a continuous demand from qualified buyers, homes didn't stay on the market long if they were priced appropriately."
At the end of the year, housing inventory across Kentucky was down 25 percent from 2015. Having 4.6 months of inventory to close out 2016 (compared to 6.1 months in 2015) puts the state into what is characteristically a seller's market, but consumers are seeing affordable prices on the buying side. Days on market (DOM), an indicator that shows housing demand, dipped 5.7 percent to 131.9 days in 2016. In larger metro areas in Kentucky such as Lexington and Louisville, days on market are down into the range of two to three months.
Even though official figures aren't yet available for 2017, local associations across Kentucky are remaining optimistic for another banner year. Reports are showing a strong economy, lower unemployment rates and the federal interest rate was left unchanged at its last meeting.
"Kentucky's economy remains stable and that is always a good thing for real estate," says Becker. "Our low cost of living compared to most of the country and the momentum carried over from an active 2016 is the foundation needed to sustain a healthy real estate market throughout the year."
On the national level, as it was echoed throughout many Kentucky regions, inventory is the biggest variable on how 2017 shapes up for real estate. New construction seems to be the main factor related to inventory. Lawrence Yun, chief economist for the National Association of REALTORS® (NAR) said, "Housing options for both buying and renting remains a pressing concern because of another year of insufficient home construction. Given current population and economic growth trends, housing starts should be in the range of 1.5 million to 1.6 million completions and not stuck at recessionary levels. More needs to be done to address the regulatory and cost burdens preventing builders from ramping up production." In fact, nationally, total housing inventory was at the lowest level since NAR began tracking the supply 18 years ago.
"We are at a time where, in most areas, well priced homes are moving fast due to low inventories. It has become a low supply versus high demand issue and buyers who want to get in the market have to move quickly to secure a home," continued Becker. "Boosting home construction should give buyers more options and help sellers feel more comfortable putting their homes on the market. Home building may ramp up going forward but if you need to sell now, the market seems primed."
In Louisville the answer depends on the property's price point.
The Greater Louisville Association of Realtors® (GLAR) reported (full year) 2016 sales up 8% compared to 2015. Sales in December 2016 were up 1.3% compared to December 2015. The average price was 3.0% higher than in 2015. For all MLS areas, the inventory of available properties was 18.8% lower than at the same time last year.
GLAR President Allison Bartholomew commented that, "Our members continue to see a strong sellers market for entry-level homes and a relatively balanced market for move-up homes. Depending on the area and price range, the luxury home market is slightly in favor of buyers due to the larger relative inventory to choose from."
From the Greater Louisville Association of Realtors December press release ...
The Greater Louisville Association of Realtors® (GLAR) reported year to date (YTD) sales up 8.4% compared the same time last year. Sales in November 2016 were up 24.5%, vs November 2015, with 1,341 homes and condos sold. For all MLS areas, the inventory of available properties was 21.5% lower than at the same time last year.
GLAR President Allison Bartholomew commented that, "Our members continued to see a strong sellers' market for homes and condos under $300k, with just a 2 month supply of inventory. Properties in the $300- 500k price range continued to sell at a pretty brisk pace, with just a 4 month supply of inventory. Buyers at $500k and higher had a wider selection of homes to choose from, with an 8 month supply of inventory."
An update on U.S. home prices from the Wall Street Journal. The news is good ...
From the Greater Louisville Association of Realtors October press release ...
The Greater Louisville Association of Realtors® (GLAR) reported sales in October 2016 were up 1.6% vs October 2015. The median price was up 5.1% YTD and the average was 3.2% higher YTD. For all MLS areas, the inventory of available properties was 23.2% lower than at the same time last year.
GLAR President Allison Bartholomew commented that, "The lack of inventory continued in October, especially in price ranges below $300k. Near record low mortgage rates helped to sustain positive sales gains. Additionally, the expanding inventory of new apartment units in Louisville has absorbed some of the new household formation and kept annual price appreciation in the 3-5% range."
The National Association of Realtors® (NAR) Chief Economist, Lawrence Yun, commented recently that, "Mortgage rates around historical lows and solid local job creation was a winning formula for sustained home buying demand all summer long. Unfortunately, for house hunters in several of the top job producing metro areas around the country, deficient supply levels limited their options and drove prices higher--especially in the West and South."
Limited home inventory tapped the brakes on Louisville's real estate market in October. The number of homes for sale fell to 4,800 active listings, or a 3.3 month supply of homes. Total homes sold were below prior year, and home price gains decelerated. That said, we remain in a seller's market with the average home selling in just 65 days.
Key October Data (vs. 2015)
Sellers: This fall is a great time to sell your home. Inventory is low and buyers are motivated. Please contact me for a complimentary market analysis on your home. Professional home staging and photos are key and I provide both. Buyers: Low inventory continues to make finding the right home difficult. I have the experience and proven buying tactics to help! And, many sellers are requiring a pre-approval letter before they will consider an offer. As a result, it is more important than ever to get pre-approved before you look. I have a great partner to help make that happen.