Home sales dip in October, so beating 2016’s record is perhaps out of reach

Photo of a home in Rock Springs Louisville Kentucky by Tre Pryor

New construction in Louisville is surging, but mostly at higher price points. | Photo by Tre Pryor

The Louisville home sales yearly record just might be out of reach after a lackluster October. Following a strong August where sales outpaced the previous year by 7.9 percent, both September and October failed to impress, charting 6 and 8.2 percent declines respectively.

Year-to-date, 2017 has 10,208 total units sold compared to 10,347 at the same point last year. With two months to go, it’s not out of the question that this can still be a banner year, but with housing inventory at historic lows, it’s a tall order.

This scarcity of housing options for Louisville home buyers lies at the center of our real estate dilemma. Homes are selling faster than they have in years. The challenge is finding a great home on the purchase side that makes the entire move make sense.

Charts of Louisville home sales and Louisville home prices for the 12 month period ending October 2017

After a disappointing October, Louisville home sales, while quite strong, aren’t likely to surpass the record year of 2016.

There were 1,348 new listings added in October, up just 1.8 percent from last year. This barely affects our total inventory level. With just under two-and-a-half months worth of homes available for sale, the market is heavily siding with sellers over buyers.

During the month of October, there were 978 homes sold in Jefferson County. This is an 8.2 percent decline compared to last year, when 1,065 properties exchanged hands.

Home sale prices also have started their annual decline as we head into the holidays. For most of 2017, prices were moving higher as expected due to increased competition.

But in October, the median home sale price fell to just $163,000. This is a 1.2 percent drop year-over-year.

Comparing our trend-line for the month tells a very different story. As of October, the 12-month trailing average was $166,954. This is 5.3 percent higher than at the same point last year.

Look for home prices to continue their decline into the winter months, giving buyers some needed bargaining strength.

New construction continues to give a boost to home values. Prices move higher at an even fast clip in this sector as the costs of building a new home have risen quite dramatically in the past decade.