Louisville home sales continue streaking, prices bounce back

For most of the past 12 months, home sales in Louisville have surpassed the previous year. Several of these (see February) did so spectacularly!

There were 916 properties sold in Jefferson County in March. While not the 23.5 percent leap we saw in February, it’s still good for an 11.3 percent gain year-over-year, which is quite strong. In fact, we have to go all the way back to 2007 to find a stronger March when talking about home sales.

Charts of Louisville home sales and Louisville home prices for the 12 month period ending March 2016.
Home sales in Louisville keep moving higher, with houses in certain price ranges selling in their first week on the market.

What’s most surprising about this market is not the actual sales totals but that these numbers are being done with an incredibly low inventory.

For much of 2015, the absorption rate in the Louisville housing market hovered around 4 months. This is low. A balanced market would hold a six-month supply. For March 2016, that number is 2.6 months.

Can you say, “Seller’s market”?

Obviously the role of reduced home buying options is increased prices and shorter days on market. Let’s tackle prices first.

The median home sale price for March was $148,950. This is 7.2 percent higher than last month and 2.4 percent higher than March 2015. Looking at things this way, we should ask, “Why aren’t home prices even higher?”

Part of the answer is that a greater than average proportion of home sales are taking place in the middle price tiers. The largest increase is in homes priced between $160,000 and $179,999, which were up more than 50 percent year to date.

Homes sales over $500,000 are actually down 4.6 percent from last year during Q1. This is happening while homes sold for $50,000 or less are down 38.1 percent, in large part due to low inventory levels.

Now let’s look at days on market.

While the concurrent days on market (CDoM) for March was only 85 days, this is actually higher than the speedy time frame we were seeing during the second half of 2015 when this number was 64-72 days.

The difference is the kind of home being sold. Move-in ready homes, asking $100,000 to $200,000 (if appropriately priced), are selling during their first few days on market this year.

You’ve heard the phrase, early bird catches the worm. Well, in today’s hyper-fast Louisville real estate market, the quickest, full-price offer gets the home.