While Sandy and I are away at another mastermind in St. Louis, I have an update for you from our market back in Louisville with the latest year-over-year statistics.
The number of homes sold rose 8.9% last August compared to August 2016. The number of homes on the market is down 14%, which is making it very tough for buyers to find their dream home if it’s priced below $150,000. Around the country, the number of homes on the market is down: starter homes are down 17%, medium-sized homes are down 10%, and larger-sized homes are down 5%.
This shrinking inventory has caused a slowdown in the number of homes going under contract in both Louisville and around the country. In fact, Svenja Gudell, the chief economist at Zillow, says, “Everyone has been talking about tight inventory, but I think we are OK calling it a straight up inventory crisis at this point. We just don’t have enough homes.”
Danielle Hale, the chief economist for Realtor.com, is quoted as saying “The housing shortage forced many first-time homebuyers to consider smaller homes and condos as a way to literally get their foot in the door. Our survey data reveals that we may see more of these homes hitting the market in the next year.”
What will the next 12 months bring in terms of new homes on the market? According to a poll by Realtor.com, 59% of Americans aren’t planning to sell, 35% are planning to sell, and 6% are unsure.
What are the concerns of these would-be homeowners? 58% of homeowners said they thought there would be a housing bubble and price correction within the next two years. 57% said homes are overvalued and unsustainable in their area. 63% of non-homeowners looking to buy are concerned about timing the market and want to make sure they aren’t buying too high.
Those concerns may be unfounded, however. Rick Sharga, an expert at Ten-X, says “We’re definitely not in a bubble. While prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars. We’ve had nine years of inflation to factor into home prices today…and, in fact, if you really dug into the analysis, what you would find is that home prices today have basically recovered to about where they were in 2004.”
As for the future, the projected mean appreciation for the next four years is expected to slide from 4% in 2018 to 3% in 2021. The most sought-after price range is currently between $200,000 to $299,000, where 31% of all new homes sales took place last month. Interest rates are still very low, but they should be going up one more time this year.
That’s it from our Louisville market. Back here in St. Louis, Sandy and I were lucky enough to have some time to tour both the Anheuser-Busch distillery and the St. Louis Arch. I took some exclusive footage of both of our tours that you can see in the video above. If you’re ever in St. Louis, I highly recommend these two stops
If you have any questions about our Louisville market or you’re thinking of buying or selling a home, don’t hesitate to give my team a call. We’d love to help you.