Louisville, Kentucky

The Louisville, Kentucky housing real estate market has all the earmarks of a seller’s market with large increases in appreciation, but also there has been strong speed of sales, and higher pricing in the selling of residential single family homes.

Louisville definitely does not have a balanced market. It’s one sided – in the hands of sellers who have the “aces”. They especially enjoy the higher pricing in the process of selling the home. It’s like being in a casino and you are the owner.

The rate of absorption has been below three months for all of last year. This is a measurement that sees the number of months it’s going to take to sell all inventory under the condition that the housing real estate market has zero new listings and the rate of sales stays the same.

A lot of new listings would have to come into the market to increase the Louisville rate of absorption, and it looks for 2018, it’s not likely.

An interesting thing is that the transactions of real estate most of the time come in pairs. When the owner of the home sells their home, they do very well. But on the other hand, when they buy their next home, they are flipped over to the buyer side and will tend to pay a higher amount. In this scenario if there is similarity in the values, there ends up being a result of balance.

When it comes to commercial real estate and apartment buildings in Louisville, there has been an 8 percent increase in the rents for 2-bedroom apartment units in 2017. That rental rate is now $950 a month. When it comes to 1 bedroom apartments, there has been a 13.8% increase in rental rate.

This is a tremendous hardship for renters. At the 13.8% rate, if it were to continue, in a short number of years, rent would be doubled.

If those who are renting had the qualifications for a mortgage, they would do far better than renting in Louisville Kentucky. The payment containing both principal and interest on a loan of 30 years on a $150,000 home would be only $760 each month at current mortgage rates.