With 2010 wrapping up, there is no better time to look back and take stock and just how truly putrid the Louisville real estate market has been and how bad the future looks for Louisville homes for sale! How do you like that one for a uplifting opening?
Instead of going through all sorts of data, I want to look at only two charts today. The first will be for asking prices and the second will be inventory levels of homes actively on the market in the city of Louisville. I will not be looking at surrounding counties, and this data does not include sold properties, multi-family units or condos, just single family homes for sale in Jefferson County.
I'll open with asking prices, the dollar amount that home sellers are placing on their listings when they are on the market and hoping to find a buyer. Normally, when we have a decent market, you would expect incremental increases in prices. So that when we compare home prices in December of 2010 to December of 2009, we would normally want to see a small rise. And if we look even further back than last year, we would expect to see an even bigger increase.
But that is not the case in our current environment! Our prices today are lower than they were in both 2009 and 2008. Ouch. And that holds true for weekly data points recorded over the past two years as well as trend lines over the same period. At this point in 2008, weekly data points show a value of about $149,000 for a median asking price. My most recent measurement now shows a median price of $145,000, a $4,000 drop in two years. Instead of increasing home values, we have actually seen an almost 3% drop!
To drive the point home further, if we pick almost any date, and look backwards, we will see that our 2010 values are well off previous measurements. For example, let's look at median asking prices of Louisville homes for sale on July 1st for each of the past two years. In 2010, home prices were $155,000 on the first day of July. One year earlier, asking prices were at $169,000. For the percentage lovers out there, that is over an 8% drop in one year. How about choosing a date in the springtime, such as the first day in April? In 2010, data shows median asking prices at $154,000 compared to $160,000 in 2009.
OK, so now I've established that asking prices of Louisville homes have not been on fire for the past two years. It's time to move on to inventory levels of homes for sale. Back in December of 2008, there were approximately 3,750 single family homes for sale in the city of Louisville, according to recorded data points. That number grew to a high water mark of over 5,300 earlier this year before falling back to the most recent measurement of approximately 4,300 available units.
I suppose you could argue that we have seen a serious reduction in the number of homes on the market, since we dropped about 1,000 properties in the past nine or ten months. But that ignores the fact that we currently have more homes for sale than we did at this time last year and the year before.
If you are an objective person, you have to look at the data and recognize that our prices are lower now than at this time in either of the two preceding years, and at the same time, we have more homes on the market at this time than either of the two preceding years. Obviously, this is not the sign of a recovering market, but rather an indication that we still have a lot of homes to buy and equity to restore before we can say our market has rebounded.