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Although there has been quite a bit of discussion about a down turned housing market across the United States; it is not true for the Louisville area. In fact a recent USA Today article written by Noelle Knox states that the monthly sales volume increased 3.9% from one year ago in Louisville and 1.2% for Kentucky. The median home price also increased 1.8% in that time frame for Louisville and 3.8% for Kentucky. She further writes ”Homes in Louisville take about 75 days to sell – the same as last year. The segment for most first-time buyers (priced from $110,000 to $200,000) is strong. Mid-price homes (up to $600,000) are selling consistently. The high end is the weakest sector… Inventory has risen significantly, to a 6.3 month supply”
The Metro Louisville area has experienced a steady growth rate in the housing market over the past 30 years. As noted in the chart below, the 30 year average is 5.84%. We had a 4.33% increase in the average house price in 2005. The only year where we had a negative growth rate was in 1982. Inflation was at an all time high this year. To adjust for inflation, interest rates rose to 16%+ thus bringing inflation under control again. You can see the mortgage rate history as well in the chart below.
Click to enlarge!
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