Real Estate Information Archive

By the Numbers

New Home Sales numbers in the Louisville Kentucky area for December 2009 appear to have fallen. I say “appear”, because there are several reporting sources and updates may still come in. The numbers show that Home Sales for December 2009 were off 5.31% from a poor December 2008. To make matters worse, the December 2009 sales were actually better than they should have been. Remember that some of the closings in December were actually delayed from November 2009 because some mortgage companies (specifically their underwriters) dragged their feet approving home buyer’s loans and some appraisers slowed their pace to the speed of a snail.

The Big Picture

Up until December 2009, the picture looked rosy. Louisville Real Estate Sales started to climb steadily in June.  Thanks to the $8000 first time home buyer’s tax credit, a new home construction tax credit and low interest rates we could say with confidence that the home sales recovery was well underway in Louisville Kentucky.  As the deadline for the first time home buyers tax credit approached in November, home sales were actually brick. November Home Sales were actually up 57.16% (by one reporting services account) over November 2008.

What Happened

Even though our lawmakers extended the $8000 first time home buyers tax credit and added an additional $6500 tax credit for home owners (living in their current home 5 years) who wanted to move, sales in December fell flat. The urgency to buy and close before the original tax deadline was gone. The need to take advantage of the free money from Uncle Sam could be put on the back burner for the time being.

2010 looks ripe for a comeback

Our phones are ringing at the Medley Sokoler team office with requests to see properties; our websites are humming away with buyers looking for a good deal. Those are 2 good indicators that 2010 could end up being a recovery year for the real estate Industry in Louisville. Some new home builders we work with are starting new construction and interest rates are staying stable (at least as of this New Year’s Day writing) more good news for the housing industry. We also expect to see a lot more homes coming onto the market as sellers regain confidence in the market.

A word of caution to all would-be sellers

 Make sure your home has been staged properly and repairs have been made, make sure your realtor has done a through competitive market analysis (CMA) to determine an accurate price. Appraisers are watching prices closer than ever before; buyers are shopping longer and taking more time than ever to find the best home in the best condition with the best price. Only the most competitive homes will sell and only the correctly priced homes will pass the scrutiny of the appraiser.

Interest in the Louisville Kentucky Home buying market for February 2008 is up from January 2008 by 13%, but a new problem is putting the brakes on buying a home, FINANCING!  New numbers just released by the Greater Louisville Association of Realtors show the number of homes that went under contract in February 2008 was 1165 compared to 1015 in January 2008. But, the number of homes that actually closed in February 2008 was down 13 % from the January 2008 under contract numbers. All indications are that mortgage companies are taking longer to finance or are refusing to finance loans.  So some homes that go under contract are taking longer to close or don’t close because of financing issues.

For months now, we’ve been watching mortgage companies tighten requirements to get a loan. Now we’re seeing hard proof that even lower interest rates won’t help buyers if the mortgage companies won’t grant those potential buyers home loans. The problem stems from several years of home loans being granted to people who did not have the credit history to support those loans. The mortgage industry was looking for the profit without considering the consequences. With so many home loans ending up in foreclosure and the government cracking down on mortgage companies who made those loans, home buyers in 2008 are paying the price for the past mistakes of the mortgage industry.  I actually saw an underwriter reject a loan because the potential buyer signed his name a little differently than the signature they had on record.  The closing attorney had the proper identification of the buyers but that wasn’t enough for the underwriters. The closing process was delayed because of it. We should point out that not all mortgage companies are responsible for the bad loans but all mortgage companies and buyers are now suffering from the crackdown by underwriters.

The number of homes going under contract in February 2008 compared to February 2007 is still down by 3%, but that’s a marked improvement from double digit negative numbers from months before.  As of today homes were averaging 88 days on the market and there are 9976 properties currently for sale in the greater Louisville area.

With the potential of another drop in interest rates coming in March 2008 and a positive feeling in the Louisville Kentucky housing market, Louisville may end up leading the country in a home sales recovery.  Now all we need are those mortgage companies to loosen lending guidelines so that people who are legitimately qualified to get a loan can by a home.