The Louisville housing market is a highly competitive and dynamic market, with homes receiving multiple offers and selling at a rapid pace. Louisville has a population of approximately 620,000 people, making it the largest city in Kentucky. The city is home to a diverse range of industries, including healthcare, manufacturing, and logistics.
The city's economy has been growing steadily in recent years, which has had a positive impact on the housing market. In this blog post, we will explore the current state of the Louisville housing market, including house prices, trends, and other relevant information.
Louisville Housing Market Update
The housing market in Louisville, Kentucky, is known for its competitiveness and strong demand. According to a recent report by Redfin, the Louisville housing market is very competitive. Homes in Louisville receive 3 offers on average and sell in around 18 days. The median sale price of a home in Louisville was $253K last month, up 6.5% since last year. The median sale price per square foot in Louisville is $150, up 2.7% since last year.
Current Housing Market in Louisville
In July 2023, Louisville home prices were up 6.5% compared to last year, selling for a median price of $253K. On average, homes in Louisville sell after 18 days on the market compared to 15 days last year. There were 845 homes sold in July this year, down from 1,005 last year.
Louisville is very competitive. Homes sell in 17 days. Many homes get multiple offers, some with waived contingencies. The average homes sell for about 1% below list price and go pending in around 17 days. Hot homes can sell for about 2% above list price and go pending in around 4 days.
Sale-to-List Price Ratio
The sale-to-list price ratio for all home types in Louisville has been as follows:
- 2021: 99.4%
- 2022: 90.0%
- 2023: 100.0%
Louisville Migration & Relocation Trends
Across the nation, 0.30% of homebuyers searched to move into Louisville from outside metros. New York homebuyers searched to move into Louisville more than any other metro followed by Detroit and Lexington. 23% of Louisville homebuyers searched to stay within the Louisville metropolitan area. Seattle was the most popular destination among Louisville homebuyers followed by Spokane and Bellingham.
Are Home Prices Dropping in Louisville, KY?
In Louisville, KY, home prices have been relatively stable in recent months. While there may be fluctuations in specific neighborhoods, overall, there hasn't been a significant drop in home prices. Buyers and sellers should monitor the local market closely and consider working with a real estate agent for the most up-to-date information on pricing trends.
Is Louisville, KY, a Buyer's or Seller's Market?
Louisville, KY, is currently experiencing a seller's market. This means that there is strong demand for homes, and sellers have the upper hand in negotiations. Properties often sell quickly, and in some cases, they may even receive multiple offers, driving prices up. Buyers should be prepared to act swiftly and make competitive offers in this market.
Louisville Real Estate Market Forecast 2023-2024
According to statistics compiled by NeighborhoodScout, home appreciation rates in Louisville have been near the national average over the past decade. Real estate appreciation rates in Louisville have tracked to near the national average over the last ten years, with the annual appreciation rate averaging 5.75% during the period.
For those interested in the Louisville, KY, real estate market, staying informed about current trends and future forecasts is crucial. In this report, we will provide you with insights into the state of the Louisville housing market and what to expect in the coming months.
As of July 31, 2023, the average home value in Louisville is $235,741. Over the past year, there has been a healthy 3.4% increase in home values. Properties in Louisville tend to go pending in a remarkably short period, with an average of just 5 days on the market. This indicates a strong demand for homes in the area.
Additional key statistics by Zillow, as of June 30, 2023, include:
- Median Sale to List Ratio: 1.000
- Percent of Sales Over List Price: 39.5%
- Percent of Sales Under List Price: 36.5%
- Median Days to Pending: 5 days
These statistics highlight the competitive nature of the Louisville real estate market, with a significant percentage of sales occurring over the list price and a quick turnaround for properties going pending.
Louisville MSA Real Estate Market Forecast
Now, let's turn our attention to the forecast for the Louisville Metropolitan Statistical Area (MSA):
Based on the provided data by Zillow, the forecast for Louisville, KY, suggests the following trends:
- By the end of August 2023, there is an expected increase of 0.4% in home values.
- Looking ahead to the end of October 2023, the forecast predicts a 0.9% increase in home values.
- For July 2024, a substantial 4.7% increase in home values is anticipated.
These forecasts indicate a positive outlook for the Louisville MSA real estate market, with consistent growth expected in the months to come. Buyers and sellers should keep a close eye on these trends and consider consulting with local real estate experts for personalized guidance.
Hence, the Louisville real estate market is experiencing healthy growth, with rising home values and strong demand. Properties are selling quickly, often above their list prices. The forecast for the Louisville MSA suggests continued growth, making it an opportune time for those looking to enter or invest in the market. As always, staying informed and seeking advice from real estate professionals is essential for making informed decisions in the Louisville real estate market.
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%.
Conclusion
The Louisville real estate market provides a steady rental market made up of several, independent populations. It combines slow population growth with a healthy market turnover to yield several opportunities for redevelopment or rent. The Louisville rental market is a stellar one. Buying an investment property is different than buying an owner-occupied home. The investment properties are designed to make money as rentals, which means you must look at it solely as an income-producing entity just like any other business.
Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities.
Apart from the Louisville real estate market, you can also invest in Pittsburgh, PA. The Pittsburgh real estate market is seeing an incredible renaissance, unlike many other Rust Belt cities. It is attracting new residents and redeveloping its downtown. And it is an excellent place to invest in real estate while it is still in the early stages of its rebound.
Huffington Post gave Pittsburgh the seventh slot on the top ten places to be a landlord. They used the average three-bedroom rent of $991 a month and median home price of $105,700 to get a gross rental yield of 11.3%. The highest grossing rental market was 15.3%, but it is rare for cities to achieve that rate, much less sustain it.
Pittsburgh has been recognized as one of only four metropolitan areas out of 200 studied by economists at Realtor.com currently sustaining an optimal balance between supply and demand. This means that it’s simultaneously a good market for both buyers and sellers, as there is no dearth of affordable properties available on the market and values are steadily increasing.
Another market that we suggest for savvy investors is the housing market in Boston, MA. Boston is the top market where real estate investments are safe and have high rates of return. Airbnb rentals are the best option for real estate investing in Boston. The Boston real estate market sees steady population growth, faces limited supply, and can’t go vertical. This means that those who invest in the Boston real estate market will see decent cash flow from nearly any property and guaranteed appreciation.
For most people, Boston is a high-priced real estate market, though it isn’t as expensive as Washington DC, San Francisco, or New York City. Greater Boston is still an expensive place to buy a house, but the years of relentless price increases may be nearing an end. Because of the large number of students, and college and university faculty, it is a no-brainer for savvy investors to invest in a rental property in Boston. Rental property in Boston is guaranteed to get a lot of demand from tenants – whether an apartment or a condo or a single-family home.
The Boston real estate market and its environs include a whopping hundred universities, colleges, and trade schools. There are more than 150,000 college students in Boston and Cambridge alone. You could buy properties across the Boston real estate market and cater to students, and your market is so diverse that you’ll always see demand.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Market Data, Trends, And Forecast
https://www.zillow.com/Louisville-ky/home-values
https://www.neighborhoodscout.com/ky/louisville/real-estate
https://www.redfin.com/city/12262/KY/Louisville/housing-market
https://www.realtor.com/realestateandhomes-search/Louisville_KY/overview
Student market
https://en.wikipedia.org/wiki/List_of_schools_in_Louisville,_Kentucky
Military
https://militarybases.com/kentucky
Landlord friendly
http://www.landlordstation.com/blog/top-landlord-friendly-states
https://www.landlordology.com/kentucky-landlord-tenant-laws
Downtown redevelopment
https://www.wdrb.com/news/russell-neighborhood-residents-view-million-redevelopment-plans/article_6fe0cb1e-982d-543f-9887-1dd102d21f64.html
Short term rentals
https://www.courier-journal.com/story/life/home-garden/2018/08/16/airbnb-mania-causing-business-boom-louisville/932815002
https://www.courier-journal.com/story/news/politics/metro-government/2018/08/14/louisville-plans-crack-down-airbnb-operators/989449002
