Kentucky Housing Market Slowing Down, But Not Crashing
Home prices in Louisville, Ky., have continued to increase in the last few months, standing in the face of a national trend that saw a record drop in the price of U.S. homes last month, the Louisville Courier-Journal says.
“The median price of an existing home in this area was $138,000 through the first nine months of the year,” said Lisa Stevenson, executive V.P. of the Greater Louisville Association of Realtors. “That’s a 1.1 percent increase over the $136,500 figure through September of last year.”
That’s down from a 2.4 percent increase reported earlier in the year by the Office of Federal Housing Enterprise Oversight (OFHEO).
In light of the numbers released yesterday by the National Association of Realtors, however, the Kentucky housing market is doing well.
As mortgage rates have risen since the peak of the housing boom a year ago, sales of existing homes have fallen by 1.9 percent to a seasonally adjusted pace of 6.18 million units as of September. It was the sixth straight drop in that statistic and the slowest sales rate since January 2004.
Louisville sales are flat so far this year.
The national price of a single-family home fell to $219,800 last month, a drop of 2.5 percent from September 2005. Regionally, median prices were down 1.6 percent in the South, 2.3 percent in the Midwest, 4.3 percent out West and 5.1 percent in the Northeast.
Housing, which had set sales records for both new and existing homes for five consecutive years, has been losing altitude in a hurry this year, as consumers were battered by rising home mortgage loan costs, soaring energy prices and a generally slower economy.
Joe Simms, president of the Greater Louisville Association of Realtors, said that national numbers are skewed by plunging real estate values in volatile markets such as California that don’t necessarily apply to Louisville.
Like Tennessee mortgage demand, Kentucky is still seeing strong activity and moderate home buying patterns. Certain Louisville areas may be seeing modest value declines, Simms said, but overall the market has seen prices fall only once — in 1982, when mortgage interest rates reached 17 percent.
Simms called Louisville a buyer’s market, a term Realtors usually try to avoid, even in this period of uncertain mortgages and stagnant sales. He thinks would-be owners have been scared off by the national reports, contributing to the local market’s sluggishness.
The Louisville market “is not going to plummet; it never does that,” Simms said. But “when in doubt, it’s human nature to say no.”