Louisville, Kentucky, with its vibrant charm and historic streets, has long been a desirable place to call home. But what does 2024 hold for the city's housing market? Buckle up for a ride through key trends that can help you, whether you're a starry-eyed first-time buyer or a seasoned seller looking to make a move.
Louisville Housing Market Overview 2024
Affordability with an Upward Tilt:
The good news? Louisville remains a relatively affordable market compared to the national average. Zillow reports a median home value of $243,872, a comfortable space for many aspiring homeowners. However, prices are on the rise. Experts predict a marginal increase throughout 2024, likely due to a limited inventory. So, expect homes to move quickly, with bidding wars a possibility.
Sellers, Seize the Moment:
The current market leans in favor of sellers. With fewer homes available, competition is fierce. Reports suggest homes are selling above list price in nearly 30% of transactions. This translates to a potential seller's advantage, especially for those with well-maintained properties in desirable locations.
Inventory: A Balancing Act:
While a seller's market is enticing, the limited number of houses for sale can be frustrating for buyers. However, there's a silver lining. Predictions suggest an increase in listings as we move through spring and summer, historically hot seasons for the Louisville market. Patience and a proactive realtor can be your best allies here.
Time is of the Essence:
The days of houses lingering on the market seem to be a thing of the past. In 2024, Louisville homes are selling fast, averaging around 5 days to pending according to Zillow. This fast pace highlights the importance of being prepared. Pre-approvals for mortgages and a clear understanding of your budget are crucial for navigating this competitive landscape.
A Buyer's Advantage Emerges:
While the initial picture might seem tilted towards sellers, there are opportunities for buyers too. Mortgage rates are expected to stabilize in the latter half of 2024, potentially offering some breathing room. Additionally, with a potential increase in inventory, buyers might have more options to choose from later in the year.
Beyond the Numbers: A Flourishing Community
Remember, the Louisville housing market is more than just statistics. The city boasts a thriving cultural scene, with historic districts, world-class museums, and a renowned culinary scene. Add to that a strong job market and a welcoming community, and you have a recipe for a place where people want to put down roots.
Final Thoughts:
Whether you're buying or selling in Louisville's 2024 market, staying informed and working with a reliable realtor are key. Understanding the trends and preparing for the pace will empower you to make informed decisions. So, dive into the Bluegrass spirit, embrace the current market dynamics, and find your perfect piece of Louisville living.
Louisville Real Estate Market Forecast 2024
Louisville, Kentucky's real estate market has been a scene of steady growth in 2024. With homes selling quickly and prices on the rise, many wonder – what's next for the Bluegrass? Let's delve into the data and explore the forecast for the rest of 2024 and even 2025.
Current Market Snapshot:
- Solid Foundations: The median home value sits at $243,872, reflecting a 4% year-over-year increase. This indicates a healthy market with continued appreciation.
- Fast Pace: Homes are flying off the shelves, going into pending status within a mere 5 days on average. This rapid movement speaks to high buyer demand and a competitive environment.
- Sellers' Advantage: With a median sale-to-list ratio exceeding 0.99, sellers are holding strong. Nearly 30% of transactions see homes selling above asking price, showcasing a market leaning in their favor.
Looking Ahead: A Measured Approach
While the current trend suggests a seller's market, the forecast for the later part of 2024 and even 2025 paints a slightly different picture. Here's a breakdown of the predicted changes:
- June 2024: A modest increase of 0.2% is expected, signifying continued price growth, albeit at a slower pace.
- Third Quarter 2024 (August): A slight dip of 0.2% is anticipated. This could indicate a small correction or a leveling off of prices.
- 2025: A more significant decline of 2.1% is projected for the end of May 2025. This suggests a potential shift towards a more balanced market, with both sellers and buyers having more negotiating power.
Crash or Boom? Neither Likely
The forecast doesn't predict a dramatic crash or an explosive boom. Instead, it hints at a gradual shift towards a more stable market. Here's what this might mean:
- Normalization of Prices: The rapid price increases of recent times might slow down, allowing for a more predictable and sustainable price growth.
- Increased Inventory: A potential rise in listings could occur, giving buyers more options and potentially mitigating the fierce competition currently seen.
- Mortgage Rates: Interest rates are expected to stabilize in the latter half of 2024, potentially improving affordability for buyers.
The Bottom Line:
The Louisville real estate market is poised for a period of adjustment. While sellers might not experience the same level of advantage later in the year, buyers could find more breathing room.
Should You Invest in the Louisville Real Estate Market
Are you planning to buy a rental property for sale in Louisville, KY to get some cash flow going into your account? Louisville is making a splash in the real estate world. It is one of the best markets for rental property investors in the country. Here are a few observations and suggestions if you are contemplating buying an investment property for sale in the Louisville real estate market.
Louisville Real Estate is Affordable
Louisville, Kentucky, emerges as a beacon of affordability, according to a recent study by the Frontier Centre for Public Policy in Canada and researchers at Chapman University.
The study, authored by Wendell Cox, analyzed 94 major cities across eight countries, including Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom, and the United States. It found that while the gap between housing costs and income has widened since the pandemic, certain areas like Louisville offer a glimmer of hope for those aspiring to own a home.
The affordability of housing in Louisville is a significant indicator of the city's commitment to maintaining a balance between living costs and quality of life. This is especially pertinent in the wake of the pandemic, which has seen a surge in remote workers seeking more spacious living arrangements. The shift towards remote work has undoubtedly contributed to the increased demand for housing, yet Louisville has managed to keep its market accessible.
Louisville is Booming
The current metro area population of Louisville in 2024 is 1,126,000, a 0.9% increase from 2023. The metro area population of Louisville in 2023 was 1,116,000, a 0.81% increase from 2022. The metro area population of Louisville in 2022 was 1,107,000, a 0.82% increase from 2021. The metro area population of Louisville in 2021 was 1,098,000, a 0.83% increase from 2020.
Louisville has a nearly one billion dollar, twenty-year plan to redevelop west Louisville. About a third of that money will be spent in the Russell neighborhood. This means that investors in the Louisville real estate market know where new infrastructure, amenities, and housing will be built. They can buy up properties now to renovate and flip later or rent out at a premium.
Lack of Supply in the Middle Market Is Driving Up Prices
The Louisville real estate market has a broad selection of affordable properties. A few luxury properties are coming onto the market. Where demand is greatest and supply is limited is the middle of the market. Both first-time home buyers and empty nesters are looking for properties priced between $100,000 and $300,000. Yet supply is so short that there are bidding wars on properties in this price range. If you can buy affordable properties and either renovate them or expand them, you could reap a significant profit.
There is a sizable Rental Market
As the largest city in the state, it is logically the home of multiple universities. The University of Louisville is home to around five thousand scholars. The Jefferson Community and Technical College have around three thousand students. Sullivan University educates another 1500 students. There are several private universities in the area such as Bellarmine University, Boyce College, Indiana Wesleyan University’s
Louisville campus, Louisville Bible College, McKendree University, and Spalding University. These schools provide a diverse market for investors in the Louisville housing market. Fort Knox is one of the largest military facilities in the United States, and it is located in the Louisville, Kentucky real estate market. It brings around twelve thousand jobs to the Louisville metro area. Louisville itself has a MEPS base, an army reserve training facility, and a U.S. Navy facility.
As of March 2024, the median rent for all bedroom counts and property types in Louisville, KY is $1,228. This is -39% lower than the national average. Rent prices for all bedroom counts and property types in Louisville, KY have increased by 9% in the last month and have increased by 7% in the last year. The monthly rent for an apartment in Louisville, KY is $1,346. A 1-bedroom apartment in Louisville, KY costs about $1,033 on average, while a 2-bedroom apartment is $1,295. Houses for rent in Louisville, KY are more expensive, with an average monthly cost of $1,695.
It Is Landlord Friendly
Property owners profit from their property in two ways. One is by selling the property for a profit. The other is by receiving rent for the property. States that give preference to the tenant over the landlord make it hard to receive the rental income you were expecting; in these states, you risk losing money if you have a non-paying tenant that costs thousands of dollars to evict, too. On the other end of the spectrum, Kentucky is a landlord-friendly state.
The state of Kentucky allows landlords to file an unconditional quit notice if a tenant has been late on rent once in the past six months. If someone has failed to pay their rent at all, the tenant can be evicted rather quickly. The state’s laws say seven days to remedy or the quit notice can be filed. The landlord can refuse to “cure” it by accepting past due payments in these cases.
Kentucky is unusual in allowing landlords to hold deposits up to sixty days as part of its laws, though other states don’t address security deposit returns. However, a move-out checklist itemizing damages and charges against the security deposit is required. Tenants can deduct rent for repairs only if the expense is minor and the landlord doesn’t address the issue within two weeks. Someone cannot refuse to pay rent claiming they fixed a bunch of little things.
There are no statutes addressing rent increase notices or rent grace periods. Landlords can recover court and attorney’s fees if a tenant must be evicted. And if the tenant is allowed to live there as part of their job and quits the job, they can be evicted immediately.
Louisville Is Encouraging AirBnB Where It Helps Tourism
The Louisville real estate market isn’t as open to short-term rentals as some places, but Louisville is making concessions to tolerate AirBnB and other short-term rentals where it can help both local property owners and area tourism. For example, they plan to allow short-term rentals in industrial and commercial neighborhoods like Butchertown.
Demand for short-term rentals downtown has caused some property developers to devote condos solely to short-term use, and the city allows it. Conversely, all short-term rentals must be registered with the city, or else you have to pay a fine. There are limits on how many people can stay in a property and property owners have to pay a local “bed tax” of nearly 10%.
