By TRE PRYOR
Both Louisville new construction and existing home sales increased in 2015. In fact, we were just 210 sales away from breaking the all-time record. | Photo by Tre Pryor
Louisville real estate 2015 edition was a big success. More homes sold in Jefferson County in December than November, and that’s not generally the case.
For the month, 859 Louisville properties exchanged hands. This is an 8.5 percent increase year over year.
What’s more, December finished the year out strong, with a grand total of 11,230 homes sold — the second largest total on record. The increased home sales activity completed the year 11.6 percent higher than 2014. As we’ve been saying all year, sales activity has been surprisingly strong.
The largest number of homes sold in Louisville took place in 2005 with 11,439. So as you can see, we weren’t far off from breaking this all-time record.
The most interesting aspect of these sales numbers was that they occurred with unnaturally low housing inventory. Obviously the demand is present, but buyer options have never been lower.
The absorption rate dropped to 3.1 months in December from 3.59 in November. In 2016, Louisville home owners have an opportunity to sell that hasn’t been present in recent history.
Given the high activity of home sales, one would expect home prices to have grown faster than our standard norm. And you wouldn’t be wrong.
The trend line one year ago was $142,942. Fast-forward 12 months, and it’s now $150,433. This is a 5.2 percent increase for the year. Given that Louisville’s standard yearly appreciation is closer to 4 percent, it just goes to show that sales activity and values don’t always make a reverse correlation.
As interest rates rise in 2016, it will be interesting to see if more homeowners step off the sidelines and take advantage of Louisville’s seller’s market. The buyers are there, especially for turn-key properties.