The current trends in Louisville suggest that it is more of a seller's housing market. With homes selling quickly, prices on the rise, and a significant percentage selling above the list price, sellers have a strong position in negotiations. Buyers should be prepared for a competitive environment and potential bidding wars for desirable properties. The future market outlook for Louisville appears positive, considering the steady increase in home prices and the overall competitiveness of the market.
Current Louisville Housing Market Trends
How is the Housing Market Doing Today?
In January 2024, the Louisville housing market continues to show resilience and growth. According to Redfin, home prices have surged by 14.6% compared to the previous year, reaching a median price of $235K. This upward trend is indicative of a robust real estate landscape in the region. On average, homes in Louisville are now selling faster, with a median time on the market reduced to 40 days, down from 42 days last year. However, the total number of homes sold in January dropped slightly to 487, compared to 499 in the previous year.
How Competitive is the Louisville Housing Market?
Louisville's housing market is somewhat competitive, with homes typically selling in a swift 36 days. Some properties even receive multiple offers, reflecting the high demand and competitive nature of the real estate environment. The average homes in Louisville sell for approximately 2% below the list price, and they go pending in an impressive 36 days. Additionally, a subset of homes can sell for around the list price and go pending in an astonishingly brief 10 days.
The sale-to-list price ratio in Louisville stands at 97.8%, reflecting a +0.7 pt year-over-year increase. This statistic underlines the strong negotiation power of sellers in the current market, with homes selling at prices close to their listing values.
Homes Sold Above List Price
A noteworthy 20.3% of homes in Louisville are sold above their list price, showcasing the competitive landscape and the willingness of buyers to pay a premium for desirable properties. This marks a +1.9 pt year-over-year increase, indicating growing market competitiveness.
Homes with Price Drops
While the market is strong, 28.7% of homes in Louisville have experienced price drops, representing a +9.9 pt year-over-year increase. This suggests some flexibility in pricing and opportunities for buyers to find deals in certain segments of the market.
Are There Enough Homes for Sale in Louisville to Meet Buyer Demand?
The Louisville housing market is experiencing a balance between supply and demand. With homes selling relatively quickly and some receiving multiple offers, it indicates that there is a sufficient number of homes available to meet the current buyer demand. However, the market is dynamic, and fluctuations may occur based on various factors.
Louisville Real Estate Market Forecast for 2024 and 2025
According to Zillow, the Louisville housing market is showing resilience and positive trends. The average home value in Louisville stands at $229,026, reflecting a 4.5% increase over the past year. Homes in Louisville typically go pending in a swift 15 days (Data through January 31, 2024).
Key Housing Metrics Explained
- For Sale Inventory: As of January 31, 2024, there are 1,836 homes available for sale in Louisville.
- New Listings: In January 2024, 619 new listings were added to the market.
- Median Sale to List Ratio: The median sale to list ratio as of December 31, 2023, is 0.995.
- Median Sale Price: As of December 31, 2023, the median sale price is $224,412.
- Median List Price: The median list price as of January 31, 2024, is $254,933.
- Percent of Sales Over/Under List Price: In December 31, 2023, 23.9% of sales were over list price, while 51.7% were under list price.
Louisville MSA Housing Market Forecast
In terms of the Louisville MSA Housing Market Forecast, the region is anticipated to experience continued growth. The forecast for the period ending January 31, 2025, predicts a positive change of 2.9% (BaseDate: January 31, 2024), indicating a robust and thriving market.
The Louisville MSA (Metropolitan Statistical Area) encompasses various counties and plays a significant role in the state of Kentucky. The counties within this MSA contribute to the overall size and dynamism of the housing market. It serves as a key economic and demographic hub, influencing real estate trends and developments in the broader region. The forecasted growth indicates a positive trajectory, making the Louisville MSA an attractive and promising real estate destination.
Are Home Prices Dropping in Louisville?
Contrary to a drop in prices, the Louisville housing market has experienced a 4.5% increase in average home value over the past year, reaching $229,026. This growth signals a robust and appreciating market. Homeowners can take confidence in the upward trajectory of property values, while potential buyers may need to act decisively to secure properties in this competitive landscape.
Currently, the Louisville housing market leans towards being a Seller's Market. With a median sale to list ratio of 0.995 as of December 31, 2023, sellers have the advantage. This ratio suggests that homes are typically selling very close to their list prices, indicating a high demand and competitive environment. Prospective buyers might face challenges in negotiations as sellers have greater leverage in this market.
Will the Louisville Housing Market Crash?
The current indicators do not suggest an imminent housing market crash in Louisville. The steady increase in average home value, coupled with a Seller's Market scenario, reflects stability. However, real estate markets are influenced by various factors, and it's essential to monitor economic trends, interest rates, and external factors that could impact the market. As of now, the market appears resilient and on a positive trajectory.
Is Now a Good Time to Buy a House in Louisville?
Considering the competitive nature of the current Louisville housing market, the decision to buy a house depends on individual circumstances. For buyers looking to benefit from a Seller's Market, acting quickly and decisively is crucial. While the market is favorable for sellers, potential buyers may need to navigate challenges such as limited inventory and increased competition. It's advisable for buyers to conduct thorough research, stay informed about market dynamics, and work with experienced real estate professionals to make informed decisions based on their specific needs and goals.
Louisville Real Estate Investment Overview
Are you planning to buy a rental property for sale in Louisville, KY to get some cash flow going into your account? Louisville is making a splash in the real estate world. It is one of the best markets for rental property investors in the country. Here are a few observations and suggestions if you are contemplating buying an investment property for sale in the Louisville real estate market.
Louisville Real Estate is Affordable
Louisville's real estate market offers opportunities for investment, but whether it is considered affordable depends on various factors and individual financial circumstances. While the market has seen rising home values, it still remains relatively affordable compared to many other major metropolitan areas. Investors can find properties at various price points, and the potential for long-term appreciation is promising. However, the affordability of an investment in Louisville depends on your budget, investment goals, and market conditions at the time of purchase.
The current metro area population of Louisville in 2022 is 1,107,000, a 0.82% increase from 2021. The metro area population of Louisville in 2021 was 1,098,000, a 0.83% increase from 2020. The metro area population of Louisville in 2020 was 1,089,000, a 0.74% increase from 2019. Kentucky's Unemployment Rate is at 3.90%, compared to 4.00% last month and 4.70% last year. This is lower than the long-term average of 6.66%.
Louisville has a nearly one billion dollar, twenty-year plan to redevelop west Louisville. About a third of that money will be spent in the Russell neighborhood. This means that investors in the Louisville real estate market know where new infrastructure, amenities, and housing will be built. They can buy up properties now to renovate and flip later or rent out at a premium.
Lack of Supply in the Middle Market Is Driving Up Prices
The Louisville real estate market has a broad selection of affordable properties. A few luxury properties are coming onto the market. Where demand is greatest and supply is limited is the middle of the market. Both first-time home buyers and empty nesters are looking for properties priced between $100,000 and $300,000. Yet supply is so short that there are bidding wars on properties in this price range. If you can buy affordable properties and either renovate them or expand them, you could reap a significant profit.
There is a sizable Rental Market
As the largest city in the state, it is logically the home of multiple universities. The University of Louisville is home to around five thousand scholars. The Jefferson Community and Technical College have around three thousand students. Sullivan University educates another 1500 students. There are several private universities in the area such as Bellarmine University, Boyce College, Indiana Wesleyan University’s
Louisville campus, Louisville Bible College, McKendree University, and Spalding University. These schools provide a diverse market for investors in the Louisville housing market. Fort Knox is one of the largest military facilities in the United States, and it is located in the Louisville, Kentucky real estate market. It brings around twelve thousand jobs to the Louisville metro area. Louisville itself has a MEPS base, an army reserve training facility, and a U.S. Navy facility.
As of September 2023, the average rent for a 1-bedroom apartment in Louisville, KY is currently $1,110. This is a 1% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Louisville increased by 19% to $950. The average rent for a 1-bedroom apartment increased by 7% to $1,110, and the average rent for a 2-bedroom apartment increased by 4% to $1,249.
It Is Landlord Friendly
Property owners profit from their property in two ways. One is by selling the property for a profit. The other is by receiving rent for the property. States that give preference to the tenant over the landlord make it hard to receive the rental income you were expecting; in these states, you risk losing money if you have a non-paying tenant that costs thousands of dollars to evict, too. On the other end of the spectrum, Kentucky is a landlord-friendly state.
The state of Kentucky allows landlords to file an unconditional quit notice if a tenant has been late on rent once in the past six months. If someone has failed to pay their rent at all, the tenant can be evicted rather quickly. The state’s laws say seven days to remedy or the quit notice can be filed. The landlord can refuse to “cure” it by accepting past due payments in these cases.
Kentucky is unusual in allowing landlords to hold deposits up to sixty days as part of its laws, though other states don’t address security deposit returns. However, a move-out checklist itemizing damages and charges against the security deposit is required. Tenants can deduct rent for repairs only if the expense is minor and the landlord doesn’t address the issue within two weeks. Someone cannot refuse to pay rent claiming they fixed a bunch of little things.
There are no statutes addressing rent increase notices or rent grace periods. Landlords can recover court and attorney’s fees if a tenant must be evicted. And if the tenant is allowed to live there as part of their job and quits the job, they can be evicted immediately.
Louisville Is Encouraging AirBnB Where It Helps Tourism
The Louisville real estate market isn’t as open to short-term rentals as some places, but Louisville is making concessions to tolerate AirBnB and other short-term rentals where it can help both local property owners and area tourism. For example, they plan to allow short-term rentals in industrial and commercial neighborhoods like Butchertown.
Demand for short-term rentals downtown has caused some property developers to devote condos solely to short-term use, and the city allows it. Conversely, all short-term rentals must be registered with the city, or else you have to pay a fine. There are limits on how many people can stay in a property and property owners have to pay a local “bed tax” of nearly 10%.
Market Data, Trends, And Forecast
Short term rentals