As we review the second quarter of 2024, the Louisville real estate market is showing signs of normalization as the sticker shock from higher interest rates begins to wear off. Buyer demand has been extremely resilient in the face of these higher rates, but the sharp increase had sidelined many sellers who were locked in at low rates on their current homes, constraining inventory and sales activity as they opted to stay put. While sellers can put plans on hold, life continues to happen and the major events that often precipitate a change in address can eventually make moving inevitable which appears to be what we are beginning to see across the market as inventory levels rise significantly year-over-year. Despite this marked increase in listings, the supply and demand dynamics remain titled in the sellers' favor as the increase in supply has been rapidly absorbed without a corresponding increase in marketing time frames. Of course, they are variations across price segments so let's dig into those!
The Overall Louisville Market
Across the broader market, the second quarter showed positive growth with the number of homes sold increasing modestly by 1.6%, reversing declines seen in the preceding quarters. The median price per square foot rose by 6.6%, reflecting ongoing appreciation in property values amid robust market conditions. Active listings increased by 11%, providing more options for buyers and helping to ease the competitive tension that has characterized recent quarters. However, properties are still moving relatively quickly as buyers snatch up any available options, as evidenced by just an 8.3% increase in average days on market, leaving inventory levels at an improved, but still tight, 2.0 months.
High-End Louisville Market (Homes $500,000+)
The high-end market ramped up significantly this quarter. Sales surged by 9.2%, and there was a substantial 29.4% increase in active listings, suggesting that sellers are returning with confidence (or as dictated by life events). Despite these positive changes, price appreciation was relatively muted, with the median price per square foot increasing by just 1.2%. This discrepancy may indicate a market adjusting to increased inventory levels, or possibly buyers taking a more discerning approach to high-value investments. Average days on market rose slightly by 7.7%, and the market closed the quarter with 4.2 months of inventory, moving towards a more balanced environment.
$1M+ Market
The $1M+ market segment outshone others with a notable 20.4% increase in homes sold (a record Q2!), underscoring a strong demand for luxury properties. This segment also saw a 7.9% increase in the median price per square foot, suggesting that high-end buyers are both active and willing to invest significantly in premium properties (although some of this gain can be attributed to a flurry of new construction sales in Norton Commons and other high-end neighborhoods). Inventory levels increased to 7.5 months, providing a much more extensive selection for buyers and signaling a shift towards a more balanced market in this exclusive segment. As competition intensifies at the highest end of the Louisville market, pricing gains should start to taper so we'll be watching for that in the coming quarters.
As we move forward into the latter half of 2024, the Louisville real estate market appears to be navigating a period of adjustment and opportunity. The increase in inventory across the board is a welcome change that should help stabilize the market and offer more choices to buyers at all levels. Sellers, particularly in the high-end and $1M+ markets, need to stay aware of these shifts to time their listings effectively and capitalize on the current demand.
For those considering entering the market, whether buying or selling, the current conditions suggest a strategic approach is more crucial than ever. As always, partnering with knowledgeable professionals who understand the nuances of these market dynamics will be key to achieving successful outcomes in this evolving landscape. Whether you're looking to buy your dream home or sell for the best possible price, the time to act is now, armed with insights from the latest market data.
Click to download the 2024 Q2 Louisville Market Report.