The January numbers are in and WE NEED MORE INVENTORY! Investors - we have good data for you too. Before we dive in, here’s that the data below is telling us.
If you are a seller - look to make cosmetic updates to your property before listing and price competitively if your goal is to sell fast and for top dollar.
If you are a buyer - get pre-approved and have that letter ready! Watch the market closely in your price range and desired area. Be ready to move as soon as you see something hit the market. In fact, have your Realtor on speed dial!
Why, you ask? Let me explain…
We’ll start with a look at last month's activity
New listings totaled 1,446 (up 143 MOM), added to the existing inventory, while 1,074 properties were sold (down 557 MOM), and another 1,219 went pending (up 76 MOM). This may sound pretty stable, but keep in mind Louisville Realtors sold an average of 51 houses per day in 2020 and outpaced the total number of properties sold in 2019 by a staggering 790.
The number to continue to watch is the absorption rate. Currently at 1.31 months, this number is used by a number of industry professionals to predict trends. Many people believe a "healthy" market has an absorption rate between 4-5 mos. The lower the number the stronger the market is in favor of the seller.
Days on market are up just a few days to 29.2. Nothing alarming here. Sold to list ratio (list price VS accepted offer amount) is holding steady at 98.3, but down from a midsummer 2020 high of 101%. The average sale price is up just slightly to $255,900, but keep in mind this is the average of the entire Louisville market and not representative of an overall increase or decrease in individual home values.
INVESTORS - take note...
The most popular January price point was $200k - $250k with 189 sales. The price point with the highest year-over-year change was the $500k + price point with a 60.9% increase in sales, but also the category with the highest number of active listings - 324. We will continue to monitor this category's performance.
Pending listings are the next number to watch because they are next month's sales numbers. January showed us the $200k - $250k category will remain the strongest with 190 pending listings, followed by $300k - $400k with 172 listings. Which begs the question, with 324 active listings, is the $500k + category on holiday?
Since supply and demand dictate how the market performs, let's look at some neighborhood data. Area 01 (Downtown, Old Louisville, Shively, W Lou) has the highest number of active listings at 216, and Area 06 (Buchel, Highview, Okolona, Fern Creek) had the largest number of sales at 132. Investors, keep your eye on this area.
Lastly, the top average sale prices are nearly tied between Area 09 (Anchorage, Glenview, Lyndon, Prospect) at $426,870 and Area 03 (Clifton, Crescent Hill, St Matts) just behind at $423,795.
February trends show inventory will continue to remain low, which puts our seller's in a strong position creating competition among buyers. Multiple offer scenarios will continue to be the norm, along with very short times on market.
If you are a seller - look to make cosmetic updates to your property before listing and price competitively if your goal is to sell fast and for top dollar. If you want to push the market a bit and don't mind sitting on the market longer you can go for a record number, but keep in mind appraisal values are not keeping up with sales prices at the moment. There may still be pricing negotiation needed on the backend.
If you are a buyer - get pre-approved and have that letter ready! Watch the market closely in your price range and desired area. Be ready to move as soon as you see something hit the market. In fact, have your Realtor on speed dial! Escalation clauses and creative offer elements may be your key to winning the deal. Asking for seller-paid concessions and sale contingencies should be reserved only for the properties that have been on the market over 2 weeks.