The spring season is here, but you may not know it from looking at the housing market. Inventory levels remain at historic lows across the market and the anticipated seasonal bump in housing inventory failed to materialize in Q1 amidst tight supply and persistent demand, significantly constraining market activity. Interestingly, there have been some significant divergences in activity at different price levels so let's take a closer look at the numbers for a comprehensive understanding of how the various market segments are performing.
The Overall Louisville Market
In the first quarter of 2023, the number of homes sold decreased by 18.7%, reflecting the ongoing challenge of limited inventory. Despite this dip in sales, the median price per square foot increased by 1.6%, indicating that demand remains strong and the pandemic era price appreciation isn't going away. Active listings in the quarter remained virtually unchanged from last year, while the average days on market increased by a notable 47%, suggesting a slower-paced market. With only 2.0 months of inventory available, the market still favors sellers, though not as strongly as in the previous quarters.
High-End Louisville Market
The high-end market (homes $500,000 and above) also experienced a decline in the number of homes sold, with a 10.6% decrease compared to the previous year. However, the median price per square foot increased by 5.6%, showcasing the resilience and sustained appeal of this segment. Active listings in the high-end market saw a 22% increase, providing more options for discerning buyers in this price range. Interestingly, the average days on the market decreased by 21%, indicating that well-priced, high-quality properties are still selling relatively quickly. With 3.2 months of inventory available, this segment leans towards a more balanced market, offering both sellers and buyers a fair environment for negotiation and transactions.
$1M+ Market
In the $1M+ market, the number of homes sold in the quarter dropped to 31 transactions, a decrease of 28%, reflecting the outsized impact that uncertainty in financial market conditions can have on this segment that is often more discretionary in the the timing of transactions. Despite the decline in sales, the median price per square foot increased by 3.7%, demonstrating the enduring appeal and value of luxury properties as this segment outperformed all others for price appreciation. With 5.2 months of inventory available, this segment leans towards a balanced market, allowing more room for negotiation and careful selection of properties. This shift can present an opportunity for buyers in the market for a luxury home to take advantage of the higher inventory, but well-maintained, updated homes in desirable neighborhoods still draw intense interest and multiple offers so the competitive environment is heavily location and property dependent.
As market conditions continue to evolve, proper pricing, marketing, and execution remain critical for sellers to maximize their home's potential value. It is important to stay informed and adapt to the shifting landscape in order to navigate these complex market dynamics successfully. Thinking of selling and curious about how these market conditions impact your home and your next home purchase? Contact us for expert guidance and insight into the current state of the Louisville housing market.
Click to download the 2023 Q1 Market Report.