Ok, pop quiz! (applause)
First question: In what month were Louisville homes selling the fastest?
You guessed it, May!
Second: What month had the lowest absorption rate in Louisville real estate history?
Yes, again it’s May!
How about a trick question? Since January 2006, which month had the highest median home sale price?
Drat! You guys are smart. The answer here is also May 2016.
Can you believe this stuff? If you walk up to the next real estate professional you see and ask them, “How’s the market?” you’ll likely be met with a pregnant pause while they gather their thoughts, stridently searching for words to accurately describe what in the world is going on right now.
You see, this isn’t normal for us. Sure, home sales typically rise during the summer months. What we’re seeing now, in terms of home sales, isn’t astronomical. But what makes it remarkable is that these sales levels are happening while home inventory has never been lower.
For the sake of comparison, there were 1,073 homes sold during May 2015. This year, that number has risen just slightly to 1,092. That’s just a 1.8 percent gain year-over-year.
But here’s the kicker! Last May, the absorption rate was just over four months, which is actually low. For May 2016, it was just 2.6 months!
That means sales increased, even when available options for house hunters were next to nothing. Can you say, “Seller’s market”?
We’re used to seeing prices increase after our cold winter months, but the jump that occurred in May was significant because it put us on pace to likely surpass our traditional 4 percent yearly appreciation number.
The median home sale price improved 3.9 percent when comparing May 2015 with May 2016. The median price was $168,000, while the price of the average home sold in Jefferson County was $207,013.
Expect prices to rise even further in June. With inventory levels so low, we can expect quick sales and increased competition over new listings. If you’ve thought about selling your home, there’s truly never been a better time than now.