Summer is most certainly the “selling season” for real estate all across the country. Louisville is no different. Whether June, July or August wins the sales crown isn’t as important as how the overall summer performs compared to previous years.
After beating out 2015 for most of the year, home sales activity has stalled a bit this summer. After a decline of 2.82 percent in June, July dropped even further, with 8.35 percent fewer home sales this year compared to last.
While 1,131 homes sold in Jefferson County in July, that number is lower than last year’s record total. Even still, it is the second most on record for that month.
A powerful force preventing home sales from being even stronger is our persistent low inventory. I know we’ve talked about this before, but when home choices are fewer, market activity inevitably slows down. The current absorption rate for Jefferson County is still below three months where it has been since January 2015. A “balanced market” would have an absorption rate around six months.
Until more home sellers decide to list their homes, we can expect sales to be good but not as strong as they could be.
Even though sales activity has dipped, Louisville home prices rose for the month of July. The median sales price of homes sold in June was $168,500, but it jumped to $176,000 in July. When we compare this to July 2015, we see a colossal gain of 11.7 percent!
Analyzing one month against another isn’t as reliable as weighing two trend-line points. When we do this with the data I’ve collected, we find Louisville homes have gained 5.5 percent over the course of the past 12 months. I believe this paints a much more accurate picture of our annual appreciation when it comes to housing.
Traditionally, Louisville homes appreciate about 4 percent per year, so this value appears to be more in line with those values. I expect when the year is complete, most Louisville home owners should expect a 5-6 percent appreciation on their investment.