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Louisville KY Real Estate Market Conditions

This Month in Louisville Real Estate July 2011

Our Gratitude Knows No Bounds

The Lynn Thomas Real Estate team would like to thank our clients Kevin & Nicole Kohrs, Patty Peace and Kathy Kleinhelter for alowing us to help them sell their home.  The Lynn Thomas Team would also like to thank Nick & Linsey Gilkey, Tony Martin, Jay & Angelica Saunders and Betty Muckey for choosing our team as their real estate professionals.  We are truly grateful to be able to help them with such an important decision; helping them buy their home.  We are honored to have the opportunity to serve them.


 

So What Happened with Louisville Real Estate in the Month of June 2011?

This Month in Louisville Real Estate July

his Month in Louisville Real Estate July 2010

Comparing the two charts above allows us to see where we were in June in relation to where we were Last year at the same time.  Let's look at the Homes Sold first.  The amount of Louisville Homes that sold this month dropped by 380.  In the Month of June, 1101 homes sold compared to 1481 homes that sold this time last year.  The Average sales price rose by $3829.  Last year, on the same month, the average sales price was $174,829.  This year it was $178,658.  The amount of Homes that went on the market dropped by 4.  It fell to 2461 down from 2465 in June 2010.  So, roughly the same amount of homes went on the market this year as did last year.  Interestingly, fewer homes sold this year over last year while the homes that did sell sold for more money.

 So, the amount of sales dropped slightly.  While the amount that the average sale brought went up. The amount of homes that went on the market stayed roughly the same.  This would seem to indicate, compared to last year, slightly fewer homes are selling while the amount of the homes are selling for more money. The amount of homes to choose from are about the same.


So What Happened to Real Estate in the rest of the country in the Month of June 2011?

The U.S. housing market has shown increased stability in home sales during 2011 compared to the previous year. The trend has been an upward one since the expiration of the tax credit last summer. Home prices have softened, particularly earlier this year, due to a higher-than-normal number of distressed sales. However, both the percentage of distressed sales and the amount of time they spend on the market has decreased in recent months, a positive sign for the market moving forward. In fact, prices have steadily followed a positive monthly trend since February. Mortgage defaults have also declined lately.

 While interest rates continue to break new record lows, the number of buyers who are able take advantage of these savings is restricted by tougher underwriting standards for mortgages. 40% of the banks surveyed by the Office of the Comptroller of the Currency tightened lending standards for mortgages within the past year. In his second press conference, Federal Reserve Chairman Ben Bernanke stated that a quicker foreclosure process and additional home price stabilization are key to boosting confidence in the market and bolstering a more robust recovery in the housing sector. 

As the economy improves, stimulus efforts by the government and the Fed will most likely continue to wind down, which typically spurs rising interest rates to keep inflation in check. Although inflation has been the source of recent concern, the Fed appears confident it will remain in check for the near term. Meanwhile, buyers continue to benefit from historically favorable buying conditions, and sellers are encouraged by increased market stability.


 

Home Sales

Home sales in May were down 15.3% compared to the same time last year when the impact of the tax credit was at its peak. Compared to the previous month, sales were down 3.8%. NAR Chief Economist Lawrence Yun states that the slower pace of sales is consistent with the slower pace of overall economic activity and that falling gas prices will help to moderate the impact of a sluggish economy. Although he continues to cite unnecessarily tight credit for limiting buying activity, the pace of sales in the second part of the year is expected to be stronger.


 

Home Price


Home prices rebounded 3.4% in May with median home prices rising to $166,500. This is 4.6% below the year-ago level and continues to keep the median price close to 2002–2003 levels. Just under 1 in 3 homes sold during May were distressed properties, which typically sell at a 10%–20% discount. This is down 6 percentage points from April and is exactly the same as a year ago. Investors represented 19% of sales, and first-time buyers accounted for 35% of May sales compared to 14% and 46% respectively a year ago at the peak of the tax credit. Home prices and mortgage rates remain favorable for buyers heading into the summer selling season.


Inventory


The supply of homes measured in months on the market at their current pace was up during May compared to April. Inventory levels remained 26% below the peak of 12.5 months in July 2010 and 12% above April of 2010 when the tax credit was in full swing.


 

Interest Rates

Rates are at a record low after steadily declining throughout May, primarily due to uncertainty in the global and domestic economies. While these incredible rates represent a significant savings for home buyers, experts note that for the benefits to fully be realized, lending conditions must loosen so more buyers can take advantage of them. As overall economic activity gets back on track, rates will likely rise to keep inflation in check. In other words, the window of opportunity for buyers to lock in these historically low interest rates may not remain open much longer.   

 

This Month in Louisville Real Estate is inspired by Keller William's This Month in Real Estate

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Data Show Housing Market Is Improving

As reported today in the Associated Press, the overall outlook for the national real estate market -- including Louisville -- remains positive and continues to get more so:

"The U.S. housing market has started to recover from the most far-reaching crisis since the Great Depression, data released Thursday show.

Sales of previously occupied homes rose for the third month in a row in June, the National Association of Realtors reported. That hasn't happened since early 2004, during the boom.

"The turnaround in the housing market appears finally to be here and indeed may be gaining some speed," wrote Joel Naroff, president of Naroff Economic Advisors Inc.

Stocks jumped on the news, with the Dow Jones industrial average rising above 9,000 for the first time since early January.

Home sales rose 3.6 percent to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised paceof 4.72 million in May. Sales were up in all four regions of the country.

It was the highest level of sales since last October and beat economists' expectations. Sales had been expected to rise to an annual pace of 4.84 million units, according to Thomson Reuters.

In another encouraging sign, the share of foreclosures on the market is shrinking. About one out of three homes sold in June was foreclosure-related, down from nearly half earlier this year.

And the glut of homes up for sale dwindled to 3.8 million. That's a 9.4-month supply at the current sales pace and another important sign of a recovery. When the market balances at a 7-month supply prices should begin to stabilize, the Realtors's group said.

That probably won't happen until next year because of a backlog of foreclosures that have yet to come on to the market. The median sales price was $181,800 in June, down 15 percent from year-ago levels but up slightly from $174,700 in May.

Nevertheless, prices have risen for three straight months in about half of the 55 major metropolitan areas tracked by the Associated Press-Re/Max Housing Report, also released Thursday."

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