Louisville Homes Blog

Where would you expect to see the largest jump in median home prices? If you guessed Atlantic City, NJ you’d be correct. Scanning CNNMoney’s chart, you’ll see that the high and low-ends of the price spectrum are both seeing big jumps and major drops.

For example, high-priced areas like Seattle, WA are going even higher—11.3% leap—while another pricey spot, Sarasota, FL is experiencing the biggest decline in the country, with values down 18%.

Here in Louisville, homes are up to $137.6k from $134.6k last year, which is a 2.2% increase. This result tops the national average of -2.7% and is much better than the South region’s average of -3.7%.

So while nationally, last year was a difficult year for home values, here in the Greater Louisville area, we are seeing small but steady growth, which is certainly a good thing.

While many analysts debate whether 2007 will be an “up” year for real estate, Taylor Blair of the Listing Information Network says their latest report “shows the possibility that we’re just coming out of the housing recession.”

One positive sign is being reported by the National Association of Realtors, who cite a 5% increase in December of pending contracts.

While today it’s certainly a buyer’s market, this condition may not stick around for long.

Nobody likes property taxes. Scratch that. Nobody outside of politicians who get to spend the money, like property taxes.

With property taxes consuming their greatest share (3.4%) of our income in this country’s history, at least we residents of the great Commonwealth of Kentucky can take some solace that our property taxes are on the low end—1.49%—of that spectrum.

For the full story and data, visit Where does your state rank?

Here’s some interesting information from The Big Picture regarding foreclosure filings by state.

Colorado leads the nation, followed by Nevada, with Texas and Florida not too far behind.

Kentucky is near to the middle, which is better but with the total number of foreclosures trending upward, there’s still cause for concern. Homebuyers need to exercise common sense when shopping because lenders will still dangle those large numbers in front of our eyes, whether we truly afford them or not.

While it’s merely a dip in the growing trend, it’s still good to see that:

Foreclosures in Kentucky dropped 3.2 percent from November to December 2006…

even while:

…but rose nearly 40 percent from December 2005 to December 2006, according to the latest report from RealtyTrac. [link]

As our country continues to increase their total debt, we’ll continue to see more and more families lose their homes to foreclosure.

The Courier is reporting that home prices in the Greater Louisville area are growing faster than a typical worker’s salary:

To afford a median-priced house in the Louisville area in 2003, a buyer needed to make at least $41,141, according to the housing policy center. That amount had increased by 6 percent to $43,764 in 2005 and by 19 percent to $48,816 last year.

The median salary for a worker in the metro area was $27,269 in 2003, according to the Bureau of Labor Statistics. It rose by 3.5 percent to $28,226 by 2005, the most recent year for which data are available.

Builders should be aware of this trend and would be wise to focus on the Starter Home niche.

Steve McLinden is a Real Estate Advisor with Bankrate and he feels that ‘07 is going to be a huge year for buyers of real estate. So for the sellers among us, he’s put together a list of 7 Selling Tips for the Down Cycle:

1. Price to sell.
2. Consider all credible offers.
3. Offer to proffer.
4. Catch the wave at the source.
5. Preserve your equity.
6. Gain in a sell-buy scenario.
7. Stay if possible.

#1 is always the most important factor in selling a home and it’s even more important when there is high inventory like we currently have now in the Greater Louisville area. His other tips are valuable as well, because in this market, buyers are going to be pressing for every advantage. Good stuff Steve!

Looks like we’ll have our answer one way or another in the next few weeks as a suit brought by California real estate brokers Marcus & Millichap will be given to U.S. District Judge Charles R. Simpson III for judgement. They claim our current practices (which are common to many states, by the way) are protectionist.

“I would expect in short order the judge would order (oral) argument and then take it under submission,” said assistant state Attorney General Robert Jones. [link]

What’s so difficult to understand about the rule? If you want to buy or sell property in a state (unless it’s your own), then you need to be licensed in that state. Seems pretty reasonable to me.

According to a United Van Lines migration study, Kentucky’s population is holding steady. Tennessee has been gaining, whereas, Indiana and Ohio are losing population, according to the movers research.

Our neighbor, Tennessee, has consistently held a tax advantage which draws in more businesses, which in turn, draws working families. So if Governor Fletcher can gain some support for his tax reforms, Kentucky could gain even more ground.

Now that McDonald’s are joining the Internet revolution, real estate professionals are getting another access point to their clients and the information their clients demand.

Steve Stratton, a McDonald’s franchisee with restaurants in Prospect, Ky., and Memphis, Ind., said the service has become popular with real estate agents meeting with clients. He said the flat-screen TVs are so popular with sports fans that he would never again build a restaurant without them.

You got that right Steve. Wendy’s? Are you listening?

While looking at things nationally, economists are expecting 2007 to be a better year for real estate. Louisville didn’t experience the big downturn of the major cities, so as they’ll experience a larger uptick, we should see small but steady improvement as sellers look for new and creative ways to make the deal.

After all, rates are still at historically low marks.

Liz Pulliam Weston tells us in 5 Lessons the Rich Can Teach You that:

Homeownership is almost universal among those in the top 10% of net worth: 95.8%, according to the Fed, compared to 67.7% overall. About 40% of the highest-net-worth group own some kind of real estate such as rental property or a second home, compared to 11% overall.

All good investors know that diversification is essential. If Real Estate is not part of your overall investment portfolio, you could be missing out. But talk to an expert before purchasing any investment property.

Louisville is part of the Fed’s 8th district, which according to the Fed’s “Beige Book” says:

This district overall showed modestly expanded economic activity. Manufacturing, service and retail reports were positive, but residential and commercial real estate conditions varied.