Louisville News

Louisville's Real Estate Outlook for 2016

The first two stages in the four stages of learning are: You don’t know you don’t know, and you know you don’t know. Knowing this, we can offer a little input to what is expected for the Louisville housing market this year.

Since inventory in Louisville isn’t available at every corner, it will probably be a sellers’ market. The absorption rate is measured by the rate at which available homes are sold in particular real estate marketing during a given period of time. You divide the total number of homes by the total number of sales for that month. The balanced market says the absorption rate is 6 months, and it doesn’t favor the buyer or the seller.

One main principle of economics is supply and demand, and in our case, if Louisville’s supply is low, the prices are higher. This does not account for homes hitting their appreciation limit. Homes are supposed to rise 3% in the next two years, but that all depends on the state of the national economy.

In December of 2015 the FED raised interest rates, which is a strong sign that the historically low interest rates are behind us. We surely don’t expect the rates to rise sky high, but most experts believe the rate will increase a quarter of a point every quarter, making it rise one point for the year.

This year’s housing market will largely depend on three groups, millennials, GenXers, and older baby boomers. The millennials make up a third of all home buyers, and they will continue to hold their place as a significant part of the conversation. The GenXers are entering the point in the lives when they are making real money, enough that they can afford big items. The older baby boomers are approaching, and some have hit, retirement. This group is looking to downsize and reduce their monthly expenditures.

We cannot separate the local housing market from the local economy holistically, because one is a significant part of the other. The...

3 Growing Neighborhoods in Louisville

                As we have seen the slow and steady housing recovery, we have also seen new neighborhoods become quite valuable. There are a few neighborhoods in Louisville that have really benefitted from the recovery. Just because they are rising though, doesn’t protect you from a sudden fall. Home prices rise and fall outside of your control.

If you’re looking for homes in Louisville, you should definitely consider one of these rising neighborhoods. These neighborhoods have seen the sharpest rate of price increases anywhere in Louisville.

 Bashford Manor

As small as Bashford Manor is, it has seen some unbelievable growth in the past two years. The median home price for a home in this neighborhood is $105,900, which is up nearly $12,000 from May in 2014. It doesn’t look as if the growth is slowing down either, which can make this investment only more attractive. Statistically speaking, this neighborhood has grown 13.4 percent in the last year, and is expected to grow another 7 percent.

What makes this neighborhood so great is it’s a perfect family neighborhood that has all the amenities they need just a short ride away.

 Old Louisville

                Old Louisville is in the heart of downtown. It’s home to the University of Louisville, St. James Court Art show, and has plenty of Victorian style homes. The median home price is $153,700, which is more expensive than Bashford Manor, but cheaper than the national median of nearly $180,000. The rate it has increased by was 12.4 percent, and is still expected to rise another 7.8 percent in the coming year.  If you are looking to get an old house with a lot of personality, this...

Monthly Home Sales Through October 2012

     In October 793 homes were sold in October. This is a 24.3% increase compared to last year when only 683  homes were sold. Upon that only 551 homes were sold in October for 2010. These numbers are only for Jefferson county single-family homes and condos, not multi-family homes.

     It's still the same story, homes prices are rising as well as the sale of homes. interest rates are still incredibly low which means it's a great time to buy a house even for those who are renting.

     It should be noted though that home inventory is on the decline, which allows home sellers to have the advantage over home buyers. The home's condition is still a key factor for home buyers, so if you are interested in selling your Louisville home, make sure that all needed repairs are made and stage the home to show its beauty. Once you do this, your chances of selling your home quickly have just increased.

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Construction in Louisville Has a Long Road to be Recovered

     The Louisville Housing market is showing tremendous signs of recovery, but we are not out of the woods yet. One of the healthiest things a market can show is construction. It means people are working, people are investing, buying, and selling. It also shows consumer confidence.

     Tara Brinkmoeller is the Director of Public Affairs and Communication for the Home Builders Association of Louisville. She had an interview recently, and here's what she had to say.

          "We hear things are actually getting better. Our Homearama this year was outstanding, which took place in two sites and most of the Homearama homes sold,and a couple with multiple offers."

     Precise data isn't easy to come by due to the nature of the construction phases. Many homes are sold via contract, but some homes are made to spec, so these homes won't be listed in the MLS or listed in the data.

     For this reason the HBAL gets its permit building data from local governments. So far for 2012 1,079 building permits have been issued, which is up from 1,027 from the entire 2011 year. David Crowe, an economist  for the HBAL predicts that building permits will rise to 4,500-5,000 by 2015. Hopefully he is right, but that's a 350% increase.

     Brinkmoeller also mentioned that she noticed a trend in Louisville, noticing better usage of space with much less waste. They want space that can serve for many purposes. She also pointed out that outdoor living spaces like screened in porches and fire pits are on the rise. They flow with the interior of the home.

      We are on the rise!

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Louisville Home Sales Recovery News

     The new home sales numbers for Louisville are out, and there's good news. For the sellers the homes going under contract are up 17.3%. The homes that actually closed in September 2012 compared to September 2011 is up 12.73%. These numbers show an incredibly strong growth spurt for a weak housing market. Just last week the Courier Journal claimed Louisville dodged the recession for the past five years, but with numbers like these, we seem to be bouncing back quite well. 

     The good news for sellers is that average price of homes being sold is up 3.1% compared from this September from last September. This is just an overall number, because some parts of Louisville actually trended backwards. There were other parts of town that were flat, like St. Matthews.

     Sellers who made minor and major upgrades to their properties found their property sat on the market an average of 12.8% fewer days than those who did nothing to their property. But there is a trend that is catching on. Buyers are becoming smarter about buying homes with upgrades. It is called the HGTV effect. Cable has taught buyers the right and wrong ways to buy a home and what to look for when doing so.

     Some good news for buyers is the interest rates remain below 3.5% and as they hear the economy is recovering and home prices are rising, homeowners will start putting their homes on the market. the news media needs more information out about the recovery so sellers will step forward and put their homes on the market. We are hearing reports about the recovery, but not much else.

     Louisville hasn't suffered a huge loss yet, and probably won't get to the point where homes become scarce and and the market becomes the seller's market. Some places in the country homes are receiving multiple offers as soon as they're put on the market. This is supposed to happen, but not...

Why Waiting For The Bottom of The Housing Market Will Cost You Money

Some people believe buying a house when it is at the bottom of the market is the best option, however that is indeed false. When home prices are low like they are now in most American cities, it is tempting to see how low they can go. What you have to realize is when buying a home you have to balance a low price bottom of the market with a low interest rate. Rates are at historic lows, which means they will rise soon enough.

So if interest rates are on the rise, but the market is still sinking, waiting another six months for it to sink even lower could cost you in the long run.

For example, if you buy a house for $450,000 and put down 20%, you will have a mortgage totaling $360,000. If your low interest rate is at 5%, your monthly mortgage payment plus principal would be $1,932.56. However, if you wait six more months an hope to get the house $10,000 cheaper at $440,000, thus with a mortgage of $352,000. By this time, the interest rate might have risen to 6%, now your monthly payment is $2,110.41. Costing you an extra $72,000 over the life of the loan.

In a buyers market there are more opportunities for negotiation. Taking the plunge and making an offer is an important step. If you come across a house you absolutely love, put your bid in and be willing to negotiate. Once a home is priced to what the current market will bear, buyers will make an offer and the house will sell no matter which way the market is headed. My point is don't let the house you love wait another six months for the market to sink. Another buyer might step in to make the offer.

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Louisville Green Homes- Finding, Changing, or Building

     Green homes are one of the fastest growing trends in Louisville, and that is a fact. We may not have the high volume of green homes like other cities, but there is a giant push for growing green homes in Louisville.

     Green is the future, and it isn't going away any time soon. People have become so environmentally friendly, they think it should be commonplace in every thing you do. The push for green grows stronger every year, and builders in Louisville are now touting their home's energy efficient features over what was the pasts fad.

     As a real estate investor you will see that the greener homes are farther away from the heart of the city. This now concerns location vs. green. It is harder to find green homes in inner cities, or has location already won this battle?

     "Location" is still the primary element when buying a home, but it has turned into "condition". The vast majority of home buyers still want a home based on location, but greening the home up a bit has been a major factor consumers will still do.

     More and more real estate agents are presenting green features in their real estate listing. whether this is a high-efficiency heat pump, super insulated doors/windows, or solar panels. This makes it much easier when you are looking for specific aspects of a house when searching for a home. It is now a seek and find process when looking for the greener homes in the area of town you want.

     You can find a green house in Louisville by simply going on a hunt for one, or making your current home a green one. Keep in mind that some home improvements are more expensive than others. If you fall in love with a home be sure to look at its green potential before writing it off completely. Lastl,y talk to you real estate agent about finding a green home. They will know where to look, and the ins and...

Louisville Has Plenty to Offer with Healthy Buisness Climate

Moving a company or manufacturing plan to a different  city is a major decision. The executives weigh a numerous amount of pros and cons before making an executive decision. They consider state tax codes, amount of skilled and non-skilled labor, proximity to strategic partners, and geographic location.

Louisville compares rather decently to other cities for companies choosing Louisville as their headquarters. The talent base in states like New York, California, and Massachusetts have been enough for tech companies to justify those states' anti-corporate tax codes. The good news is the balance has been shifting to smaller cities lately.

The tax foundation has published the tax climate index for 2012 and Kentucky ranks 22nd with an index of 5.20. The higher the index score the more favorable tax system.  Indiana comes in at 11th with a score of 5.99, while Tennessee was ranked 14th and a score of 5.62. Wyoming, South Dakota, and Nevada came in the top three respectively, while California, New York, and New Jersey came in last.

Coming in 22nd is pretty good even when there is room for improvement. It's better than half!!

. The cost of living is also a major factor in a corporation's cost structure. They must consider cost of goods, salaries, energy costs, real estate, etc. All of these factors are weighed by decision makers. Louisville real estate matches up rather nicely to a similar city such as Charlotte, North Carolina.

Louisville's average listing price is $206,000 while Charlotte's is $265,500. The average price per square foot is $94 in Louisville and $175 in Charlotte. The most impressive factor is the average number of sales. Louisville is 962, much greater than Charlottes 752.

Louisvillians pay less for their homes, get more house for their money, and have a higher sale activity.

If a corporation moving from a city like Charlotte to Louisville, they would experience a more business-friendly tax situation, save...

Top 3 Myths about Louisville Real Estate Agents

Myth 1: Louisville real estate agents make a ton of money.

Even though this myth is a widely held opinion, it isn't true. The top performing 5% of agents make 1/3 of all the revenue, while the top 10% make 54.2%. While the average gross income for a Louisville agent in 2011 was $27,364 the mdian income was just below $13,000. Just because a handful of agents are make pretty decent money doesn't mean it's the norm for the entire industry. Keep in mind most agents are only part time.

Myth 2: Agents must do everything their clients ask.

An agent is defined as a business representative. A realtor is a licensed agent who adopts a higher level of service through the Realtor's Code of Ethics. The agent is supposed to protect and promote their clients best interests, and here are three kinds of requests that are not supposed to be asked of by a client.

  1. Any unlawful request, such as the Fair Housing Statutes
  2. Any legal requests, but is'nt in the clients best interest. Agent's training and experience gives them the credentials to know the difference.
  3. Any lawful request that is within the legal limits, but is beyond reasonable service. Just because the client has Wednesday off doesnt mean you should show them 65 houses in one day. 

Common sense is the usual winner here. Agents want to have a good experience with their clients so they are referred to friends, but if the client's requests jeapordize the agent's license there will be problems. This experience is suppose to benefit both parties, and maybe even construct a freindship.

Myth 3: Agents get referral dollars from lenders, appraisers, home inspectors, etc.

By law this myth isn't true. By law the only referral fee an agent can receive money from is their own broker, and that broker is only allowed to get a referral fee from another broker. 

How this works: Agent Q helped the Smith family buy a home several years ago, and now the Smith family...

Freddie Mac Means What for Louisville?

Last August Freddie Mac issued its press release on the Economic & Housing Market Outlook.

The outlook highlights:

  • Employment has risen 117,000, which is the best it has been since April 2011. The unemployment rate decreased a tenth to 9.1%.
  • In the first half of 2011, economic growth was figured to be about 0.8%at an annual rate, which is still too weak to create jobs to stay up with the growth of the growing labor force.
  • Comparable to the first quarter of 2008, borrowers are paying around $130 billion less in mortgage interest today.
  • The interest rates on 15-year fox-rate loans are always a good idea for buyers considering refinancing. It reached 3.5% in early August assuring the refinance boom continues.
  • Freddie Mac House Price Index for the U.S. shows that prices are down 25% on average,  as of June 2011 compared with its peak in 2006.

They predict a reasonable time frame in the future where interest rates will stay their current range. While home values have dropped 25% in the past 5 years, Louisville has actually gained 1.5%.

It's encouraging to know that employment has risen, but it needs to continue to do so along with the consumer confidence for the market to really have a good rebound. What is good for the country is good for Louisville, but on a smaller scale. Let the good news roll.

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Top Seven Home Designs for 2012

In the middle of the muck of the housing market are home design trends rising for 2012. Let's take a look at the top seven of them.

1. Home Size is Decreasing.

     Louisville is seeing less homes being built, and the ones that are being built are smaller in square feet on average. Families are choosing to build smaller, more effecient homes. This trend began in 2007, and the total square footage has been decreasing every year. It looks like it will continue to decrease through 2012.

2. Green Building Components.

     Most Americans are valuing green building materials more and more each month. This trend will not have an end in the future. A related concept is utilizing repurposed materials (recycling). So designers are finding these old recycables and reusing them in homes, which some actually do look pretty nice.

3. Reducing Home Maintenance.

     As we get older we won't want to keep up with more and more maintenance. Maintenance-free living is the preferred path for most home owners, but it is inevitable. However, maintenance-free living will be a major factor for homes design. Using composite building materials instead of wood reduces the need for a painter to paint the walls. Vinyl siding improves exterior of the home for the long run.

4. Flexible, Accessible Layouts.

     Rooms with multiple room options give home owners flexibility in choosing which room they want to serve what purpose. Larger kitchens that can hold a family dinner are replacing traditional dining rooms. Accessibility is also a new home design trend that is catching on fairly fast. People are living longer in this time period. So you will see wider door frames, lower sinks, more wheelchair ramps, and more grab bars the bathroom. Single story homes will fetch a higher price than multi-level homes (per sq. ft.)...

Gene Snyder Blasting Affects East Louisville Residents

Gene Snyder Blasting to Start Soon

Will You Be Affected?

Make sure to plan accordingly if you live in Eastern Jefferson County. The Department of Highways District 5 Office advises motorists that construction crews will start blasting work on the southbound shoulder of I-265 (Gene Snyder Freeway) near the U.S. 60 (Shelbyville Road) interchange Tuesday, October 25th between 1 and 4 p.m. Blasting work will continue in the same area each weekday between 1 and 4 p.m. for approximately two weeks. During blasting, traffic in both directions will be stopped from five to 15 minutes. Temporary traffic stops will also occur on Shelbyville Road between North English Station Road and Beckley Woods Drive.Motorists are encouraged to watch for traffic slowdowns in the blasting area and to consider using alternate routes. The actual starting date and duration of this work may be adjusted if inclement weather or other unforeseen delays occur. 

Dial 511 or log on to 511.ky.gov for the latest in traffic and travel information in the Commonwealth of Kentucky.

 
For more information:
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Closing of Sherman Miton Bridge Makes Louisville More Desirable

The most recent news concerning Louisville is the closing of the Sherman Miton bridge. Louisville politicians have been arguing with East End money for more than ten years. They've been arguing about the building of the East End bridge. Engineers have estimated the cost for repairing the bridge, and the calculations still aren't complete since it took place September 8th.This may mean a few things for real estate in Louisville.

One thing for sure is that if you're looking to buy a house in the Kentuckiana region, you will not want to buy one in southern Indiana. Even though 17% of the Louisville workforce is from southern Indiana, the closing of the Sherman Miton bridge will have substantial effects on commuting. Homeowners trying to sell in southern Indiana and Floyd Knobs are having a difficult time selling

On the other side, homeowners trying to sell in Kentucky are seeing a small rise in sales. Areas like Crescant Hill, Highlands, Audoban Park, and downtown.

The end to real estate recession isn't near.

Until things are back to normal, we won't be able to evaluate the extent to which the bridge failure really affects property values and transaction.Forcasting things like these never really pans out well for anyone, so there's no reason to try and guess which way the dice will roll. Goodluck with your real estate adventures.

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Has the Louisville Real Estate Market Hit Bottom?

Greedy borrowers, shady lending practices, and not much common sense from our elected officials. Since the beginning of the house crisis, not much has been done to fix it. Our forclosure numbers are through the roof, but maybe the worst hasn't come yet. Most say our recent legislation is a step in the right direction.

According to the National Association of Realtors, distressed sales have peaked. Of coarse forclosures aren't going to stop tomorrow, nor the next day. But it is a positive step when there are less forclosures this month than last month.

Distressed properties are homes that is drowning financially, and is drowning surrounding properties. Even if your mortgage payment is paid to date, the short sale next door or down the street are negatively affecting your home's value.

Louisville doesn't have the worst housing market, however, home prices have dropped one percent from July 2010 to July 2011. Even though our Louisville market isn't the strongest, it's certainly not the worst.

So where do we go now? WHo knows, but jobs are the major concern for right now. Louisville job rate hasn't declined, but has held steady at 9.5% so we'll have to endure the rough waters until this recession ends.

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Property Taxes

Housing prices are decreasing in many markets, but your property tax bill is most likely increasing. But you can fight back is the good news.

Propert taxes in the United States have increased 20% from 2005-2009 says the most recent data available. The median annual real-estate-tax payment was $1,917 in 2009 from $1,614 in 2005. Home prices decreased 31% in major suburban areas during the same period.

Local governments normally don't measure house values every year and they have limits on property tax increases, which is why the value of a house downs't move in snyc with property taxes. That means when the market was healthier, your house value should reflect your property tax rate. There isn't much that can be done about your tax rate (set by local governments), however home owners can appeal to their local accessors to get their assessment lowered. WHich will translate into a lower tax bill.

Most homeowners are paying too much for property taxes, but there are ways to get a successful appeal. You need to fact-check your accessor's work. Nearly half of all successful appeals begin when homeowners find an error in the accessor's description of their home. Finding these errors can drive up the value of your house significantly.

Local officials find value in your home by house-by-house appraisals, computer models, and even ariel photogrpahs to see if there are any new additions to your house like a swimming pool etc. Since it is difficult to evaluate every house every year, they also look at recent house sales in your area.

Errors are not uncommon when finding the value of your home. So if you have the money to spare, hiring a lawyer or property-tax consultant is worth it. Appealing your house value is something to look into if you think you are paying too much in property taxes. Depending on the state or area, evaluations are every year or every couple of years. So take a look if you think you're paying too much.

Next time we will talk about how to...

J.D. Power & Associates Award

J.D. Power & Associates announced on July 27, 2011 that Remax ranked highest in customer satisfaction for buyers and sellers in 2011 residential real estate survey. It’s encouraging to know that our clients do appreciate us in this difficult market. We work hard for their continued trust and confidence while we only deliver our best efforts. Thank you to all of our clients, we appreciate your dedication to our real estate family, and we promise to continue serving you even better than before because you deserve it.

Buyers

Sellers

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