How is the Louisville Real Estate Market? A year in review and a look into 2020
2019 was a remarkable year for First Saturday Real Estate but how did the Louisville Real Estate market perform? One of the most common questions we are asked is “How is the market?” Let us share some insight into our last year and share some projections for 2020.
2019 - in the Rearview
The market in 2019 aligns with what we saw in the previous two years. From 2018 to 2019, average prices in the Greater Louisville region increased 5% from $219,060 in 2018 to $230,011. The number of homes sold in our area dropped slightly from 18,031 to 17,924. The average days a home was listed before it sold “days on market” increased from 41 to 42 days. Other than the significant increase in average price, 2019 was a relatively flat year.
The significant price increase in 2019 was driven by buyer demand. The millennial generation is still catching up with the rate of homeownership that has lagged since the 2007 and 2008 recession. This generationally driving increase in demand combined with a home building industry that is still working to recover to pre-recession production levels causes an issue with insufficient supply for buyers. The continuation of historically low mortgage rates is yet another factor driving demand for housing.
The high demand for housing in our area certainly had an impact on our clients. Homes in good condition at the right market price sold fast. This impacts sellers and buyers differently. Sellers have to be prepared for a speedy home sale that could be as short as 45-60 days. We worked with our clients to strategically price and time their listings to meet their goals. In this “seller’s market”, buyers have had to act quickly. The best houses sell rapidly and we closely watch for houses new to the market that meet clients’ needs. There is little room to negotiate in this high demand market. Frequently, buyers will present competing offers and the seller chooses the one most appealing. Consulting on buyer strategy in a competitive market is a key value we provide to our clients and we excel at helping buyers meet their goals despite a challenging buyer demand.
What is expected in 2020
Most economists and analysts anticipated 2020 to be more of the same. Demand is expected to be very high and interest rates low. Demand in Louisville, like many places across the country, will be driven by the millennial generation, low mortgage rates, and migration. More and more people in the United States are relocating to what some consider “fly-over” states like Louisville. Residents of the coastal U.S. are being driven out of their cities due to price and climate change. Louisville is an ideal city for coastal migrants to land because of our relatively low cost of living, climate, proximity to many major metropolitan areas, and access to both domestic and international travel. In the past two years, we have worked with many people relocating to our great city and we see this as a small yet growing factor that impacts demand.
Although the market is expected to remain stable with moderate growth, extenuating factors could impact the economy and cause demand implications. Markets love stability. A stable environment enables people and businesses to make long term decisions such as buying real estate. Trade wars, combat war, or a dramatic change in governmental policy could impact the real estate markets universally. Aside from dramatic changes in the status quo, it is widely anticipated to be a strong stable year.
Buyers and sellers both have opportunities in 2020. Buyers have an opportunity to purchase homes in a market expected to remain high demand for the foreseeable future. Investing in an asset that will likely, based on historical analysis and projections, increase in value over time is an excellent decision. Sellers have the luxury of entering the market with confidence. With price and condition aligned, a home should sell quickly for a historically high value.
We are excited about 2020 and expect tremendous growth. If you are considering making a move in 2020, we should talk. We can provide insight and information to help understand your options. We can do the same for friends and family members considering a move. In our opinion, it is never too early to connect with us in order to understand, specifically, what solutions we can provide for your real estate journey.