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Louisville Real Estate Fluer de Lys Tre Pryor, Realtor®
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Is It a Good Time to Buy Louisville Real Estate?

Updated: November, 2011

People who know me know that the last thing I want to be is an overbearing salesperson. Some thought I wouldn't succeed in real estate because I didn't "push for the sale." Well, I don't. And, those people were wrong.

Even though I never try to steer my clients into purchasing a particular property or selling their Louisville home, I do communicate, as objectively as I can, what the state of the market is. You are intelligent enough to draw your own conclusions.

In that spirit, I'm making a case for why I believe that, for many people, now is an incredible time to buy a new home. This is why.

What Drives the Louisville Real Estate Market

Basically, what drives the Louisville, KY housing market are the same things that drive markets around the country. Here are the "Big Three."

  1. Home Prices

    While home prices dropped last year here in Louisville, the modest decline was nothing compared to the major drops in states like Nevada, California and Florida. Historical data shows that Louisville homeowners have experienced 4%-5% annual appreciation of their homes going back decades.

    Chart annual appreciation for Louisville homes back to 1990.
    Here is a chart of Louisville homes annual appreciation going back to 1990.
    As you can tell, homes haven't appreciated the last few years at a rate consistent with Louisville's historical trend. This anomaly isn't likely to continue as foreclosed homes have accounted for much of this recent change.

  2. Home Inventory

    Buyers of any kind of good or service like to have choices. The more choices, the better! For the past year active listings on the Greater Louisville Multiple Listing Service (MLS) have ranged between 8,400-8,800.

    Depending on what you're looking for, you should have a large number of options from which to choose. This gives Louisville buyers a competitive advantage in price negotiations.

  3. Mortgage Interest Rates

    Interest rates play a huge role in determining the true price someone pays for a house. The longer the term of the mortgage, the stronger the role rates play.

    It shouldn't take a salesperson to convince you that today's interest rates are amazing. Just look at this chart.
Chart of mortgage interest rates back to 1971.
In this chart, you can tell that current interest rates are at 40-year lows.

Taking all three of these together, it's now possible for a Louisville home buyer to find the place they want (lots of options), pay less for it than they normally would, and finance their new home at an unbelievable rate. It's a very attractive situation for those who act now.

Who Should Buy Real Estate Now, Who Should Wait

An extremely important factor for anyone considering the purchase of a new home is their current earning potential. If you are currently looking for work, or are uncertain about how long you might keep your current job, then you really shouldn't be considering a real estate purchase.

(Personally, I believe that this applies to both renters and current homeowners. Others disagree.)

If your employment situation is stable, there's still one scenario where I wouldn't recommend you buy/sell in our current market. That scenario is when you have a house to sell and the home you're looking to purchase is significantly less expensive than your current home.

Right now, it's truly a buyers market (see above), so while you'll likely a good deal on the purchase of your new home, you're unlikely to get a very good price on the sale of your current home. If this scenario fits you, my advice would be to play the waiting game.

So who should buy now? Pretty much everyone else.

  • Renters looking to purchase their first home
  • Couples looking to buy a nicer, more expensive property
  • Families who need a bigger house with more space
  • Mature families looking to improve their standard of living

Anyone that matches any of these scenarios would benefit financially> from buying in our current real estate market.

Does that sound like you?

Have A Question About Louisville Real Estate?

Contact me today and I'll answer any questions that you have. Or, if you'd like me to be your Realtor® that's even better! Top agents put you first!

Email Tre or call (502) 291-7406.