Summer is here and the hot market conditions noted in our Q1 report show no signs of cooling off. The national inventory shortage remains the big story for the Louisville market and although its effect varies with price range, we continue to see multiple-offer scenarios and aggressive offer terms from buyers as they compete for the limited supply of quality homes across Louisville's east end. The higher inventory level of high-end homes ($400,000 and above) has continued to fuel a boom in the higher price segments with incredible year-over-year increases. Of course, some of these gains can be attributed to the base effect of comparing activity against the early months of the pandemic, but the market performance remains historical in both absolute and relative terms.
The Overall Louisville Market
Despite a 12.7% decrease in active listings for sale, the overall market picked up steam and ended the quarter with a 14.1% increase in the number of sales year-over-year. Of course, this increased demand coupled with a reduced supply pushed prices higher with the median price per square foot climbing to $156.99, a 13% increase over last year. As a sign of the times, the sold price to list price ratio passed 100% for the first time as buyers bid up average property values to an all-time high of 100.17% of the sellers' asking price. Inventory levels across the market tracked in line with Q1's performance with just under one month's worth of homes available for sale throughout the quarter. As always, real estate is hyper-local and these statistics vary widely depending on area and price range so check out our full Second Quarter Market Report for a better picture of what's happening in your neighborhood.
High-End Louisville Market
Inventory levels in Louisville's high-end market (homes $400,000 and above) dipped from 3.56 months in Q1 to 2.45 months this quarter, driven by an incredible 43% YOY increase in the number of transactions. This activity is up slightly from the 35% increase noted in our Q1 report and continues to be fueled by historically low interest rates, the wealth effect afforded by record-high equity markets, and more available inventory. As is to be expected, this strong buyer demand has driven up prices with the median sale price per square foot rising 10.6% YOY to an all-time high of $201.25 and marketing time frames have dropped by 64.6% from an average of 113 days on market last year to just 40 days necessary this quarter for a new listing to secure a contract. As is true for the overall market, the pricing gains are not evenly distributed across the market as appreciation ranged from 2% to over 13% depending on the geographic area so make sure and check out our full Q2 report to see how your neighborhood is doing.
The market's performance continues to improve as we move up the price scale to the highest end of Louisville's housing at $1M+, representing just under 0.5% of the total market transactions. This thin segment has seen an astonishing 162% YOY increase in the number of closed transactions for the quarter! Again, some of this is due to the base effect of comparing against the early pandemic months, but even comparing against Q2 2019 still yields an impressive 55.5% increase over a more normalized quarter. With 79 sales closed YTD at $1M+ and another 24 sales already pending, 2021 is already a record-setting year for million-dollar properties with 103 properties sold and we're only half way through the year! Market conditions remain the most favorable for buyers in this price range with 6.8 months of homes for sale, a slight increase over Q1, so there's plenty of inventory to continue to fuel strong performance for this sector in the second half of this year.
As was the case last quarter, the buyer demand remains historically strong at all price levels with market activity primarily driven by the availability of homes for sale. Thinking of selling this year? Contact us to find out how the market conditions impact your home and what it means for your next purchase.