The 2020 Louisville real estate market is off and running and while it's too early to tell what impact COVID-19 will have on the spring selling season, we do have the year-to-date numbers from February showing the health of the overall market before the self-quarantining measures took effect. So far, high-end sales of homes $500,000+ have held their ground with 91 closed transactions through the end of February, exactly on pace with 2019. The overall market has notched a 3.9% gain in closed sales for the year-to-date primarily due to double-digit gains in the $200,000-$400,000 price segment. New pending sales for the high-end and overall market are tracking similarly, and with the typical time frame of 30-45 days required from to make it from an accepted contract to the closing table, these results should hold true through the end of the first quarter as any impact from COVID-19 shouldn't show up until the beginning of Q2.
Louisville's Real Estate Inventory "Crisis"
Inventory levels of active listings continue to lag historical norms with only 2.21 months of homes currently available across the market. The increased competition for the limited number of homes has helped to drive the median sale price to $185,000, an increase of 4.79% year-over-year. Interesting, this inventory "crisis" often mentioned in the local and national media (like most blanket statements about a market as nuanced as real estate) fails to hold true for wide swaths of the Louisville market as you dig deeper and look at the absorbtion rate of homes segmented by both price range and geographic area.
Currently, the high-end Louisville real estate market has 481 homes available for sale at $500,000 and above. With 916 closed sales in this price range over the last 12 months, some quick math reveals that Louisville currently has 6.3 months of available inventory in the $500,000+ price range, or nearly three times the inventory level of the overall market! Since the National Association of Realtors defines a balanced market as one in which there are 6 months of inventory available, the high-end segment is far from being a seller's market. In fact, the highest of the high-end of the Louisville market at $1M+ currently has 15 months of inventory for sale, quite a contrast with what is being widely reported in the press! Depending on the price range and geographic location, some submarkets of Louisville's high-end real estate can have up to 3 years of homes available so it's extremely important to understand the nuances of each submarket around Louisville and how they impact pricing and if you are considering buying or selling in today's market conditions.
What Does This Mean for Your Home?
The dramatic differences in inventory levels at different price ranges isn't unusual, but it is definitely surprising to many of my clients buying and selling in the high-end segment. Knowing the absorbtion rate and relative competition for a particular property is key and influences everything from the proper pricing strategy for the home, to how much time and effort are worthwhile in preparing the property for the market, to the best negotiation strategy for an offer. Curious about the market conditions for your home? Contact us and we'll be happy to provide a no-obligation analysis of the competitive environment for your home.