The median asking price of homes for sale in the Louisville Ky real estate market held steady this past week.  That’s my attempt at being positive.  For one week the asking price didn’t fall, which I suppose is good news, given how far the asking price of Louisville homes has fallen recently.  Over the past few months, the median asking price of Louisville homes for sale has fallen from $170,000 down to the most recent weekly measurement of $145,000, a drop of $25,000!

Louisville homes for sale are experiencing a worsening market, as there seem to be fewer buyers than before, homes are staying on the market longer, asking prices are dropping and even more homes are coming on to the market in hopes of a sale.  According to data collected by Altos Research, it is apparent that our local real estate market is in worse shape than this time last year, and quite a bit worse than the summer months.  Combining may different statistical criteria, Altos then releases a new data point, called the Median Market Action Index, which is basically a measure of how well homes are selling and answers a basic question:  Are we in a buyers market, or a sellers market?

When looking at the chart above, remember that the higher the measurement, the closer the Louisville real estate market is to a seller’s market, and the lower the measurement, the further into a buyer’s market we are in, with a measurement of 30 signifying a neutral market.  Louisville hasn’t seen a neutral market in quite awhile, but it appears that we are drifting further into a buyers market than we have seen in a long time.  And given the severity of the recent decline, I’m afraid we might not turn out of this market any time soon.

Well, this can’t be good.  Unless you are a buyer waiting for the Louisville real estate market to weaken even more, to be able to really score a great deal from a desperate seller.  Recently, I posted a short article with a graph showing how dramatically asking prices of homes for sale in Louisville are dropping, well below where they were this time last year.  And now, today, I am sharing with you a graph showing a large spike in the number of homes currently on the market in Louisville.

I know there are a lot of Realtors, locally and nationally, who want to believe that 2010 is going to be a way better market than 2009, but I’m not a believer.  And with numbers like this coming out of my local market, I haven’t seen much to make me change my mind.  Our days on market is higher than this time last year.  Our median asking price is lower than this time last year.  And our inventory is higher than this time last year.  Taken together, I’d say things are looking pretty sour right now, and 2010 stands a chance of being a worse year for Louisville real estate than 2009.

Sometimes as I look through all of the data I collect about Louisville real estate, I forget to keep it all in perspective.  I suppose that it’s bad news for home sellers if prices keep dropping here in town, but how is the market across the county?  Is it possible that even with a recent downward slide in prices, that homes for sale in Louisville are performing better than homes in other cities in the region, and beyond?  To answer that question, because I know you have all been wondering about it for some time, I have included a few graphs of different large cities to compare and contrast with our own Louisville real estate market.

Homes for sale Louisville price

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Even as prices hold steady for Prospect real estate, it is taking longer and longer for homes to leave the market.  I have included a graph below showing the average days on market for active homes for sale in Prospect.  As you can see, since late April or early May, the trend has been pretty steady, with the average time on market going from about 125 days all the way up to last weeks measurement of almost 190 days.  That increase is more than two months worth of mortgage payments!  And in Prospect, the average home for sale is right around $500,000, so you can imagine what kind of financial impact that is having.

Prospect Ky Homes For Sale Days On Market

Another interesting note about homes for sale in Prospect, is that the trend for the past few months has been for the inventory level to drop.  However, as the 90 day trend line continues to drop, it is interesting to note that last week’s data point showed an increase in the number of homes currently on the market after quite a few weeks on a decrease in inventory levels.  Is this the beginning of a new trend, or simply normal variation in an otherwise downward move?  Stay tuned for more details…

Prospect Ky Homes For Sale Inventory

If you have any questions about Prospect real estate, or homes for sale Louisville, please visit my website at www.GregFly.com.  Also, please feel free to call anytime or send me an email at greg@gregfly.com.

Louisville Ky Short Sales Series

With more and more short sales coming on to the Louisville real estate market every day, it is no surprise that I am fielding more and more questions about these properties.  Frequently I am asked “Do short sales make a good investment?”  I would have to say that I hear this question more often from people who are looking to get started in the investment game, or have heard that there is some serious money out there flipping short sales, with little downside.

It is important to think about these homes coming on to the market, and what characteristics most of them share.  Frequently, a lot of these homes were bought with very little money down, with 100% loans, or maybe FHA loans with only 3% down.  That is one of the reasons the sellers had no equity with which to work, and why they owe more on the house than it is worth.

One other thought that is very important to keep in mind is your investment strategy.  Are you comfortable buying a home for investment at 80% of perceived market value, once the property is fixed and ready to sell?  Most serious investors are not.  They expect to find a deal where they can buy a home at closer to 65% of the future repaired value.

And this is where the conflict happens.  The bank is likely holding a loan that hasn’t been paid down at all, and you are looking for a tremendous discount, which the bank will most likely be unable to work with, due to FHA limitations and other factors.

So my short answer to the Louisville short sales question is, typically, no, short sales do not make a great investment.  At least not in the short run.  If you are looking to buy and hold, that is a different matter.  But for a quick flip, it will be very difficult to find a property that fits all of the requirements a seasoned investor would require AND have a banker approve the amount of the short sale you would need to make the deal work.

If you’d like more information on Louisville Short Sales or short sales in general, please make sure to visit my website and I’ll be happy to answer your questions.

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