The Louisville real estate market continued to make earnest gains in 2016. Home prices and appreciation rates rebounded nicely during the first-half, although still behind the national average. Home prices for Louisville real estate were up from a year ago, with gains in the last three years extending the trend of positive price growth since the recession. For homeowners and investors, the Louisville real estate market continued to take steps in the right direction in 2016.
Market factors such as home affordability, new housing construction and the local economy continued to positively impact the Louisville real estate market in 2016. The first six months of the year witnessed improvements to both unemployment and job-growth, as each outperformed the national average. Construction for new housing also remained hot. The pace of construction in Louisville surpassed the rest of the country during the first-half, and the trend is expected to continue. Together, the elements have helped the Louisville real estate market to boast one of the more affordable housing markets in the nation in 2016.
Louisville, KY Real Estate Market Statistics:
Home appreciation was mild for Louisville real estate during the first-half of the year. One-year and three-year appreciation rates were 3.0 percent and 12.2 percent, whereas the national average achieved rates of 4.9 percent and 17.8 percent respectively. For Louisville real estate investors and homeowners, however, gains in the last three years have extended the trend of positive price growth since the recession. Moreover, the growth in appreciation rates is translating into total home equity gains. For those considering Louisville real estate investments, the following outlines appreciation gains in previous years:
- Homes purchased in the Louisville, KY housing market one year ago have appreciated, on average, by $7,428. The national average was $14,963 over the same period.
- Homes purchased in the Louisville, KY housing market three years ago have appreciated, on average, by $25,491. The national average was $46,878 over the same period.
- Homes purchased in the Louisville, KY housing market five years ago have appreciated, on average, by $44,330. The national average was $82,353 over the same period.
- Homes purchased in the Louisville, KY housing market seven years ago have appreciated, on average, by $45,874. The national average was $77,054 over the same period.
- Homes purchased in the Louisville, KY housing market nine years ago have appreciated, on average, by $42,041. The national average was $31,126 over the same period.
Total home equity continued to make headway in 2016. Although still below the national average, equity gains for the Louisville real estate market are beginning to pick up as price appreciation and principle payments in the last three years have boosted total equity growth since the recession. However, equity gains for Louisville real estate in the last nine years have yet to outpace the national average. Homes purchased in year seven experienced the biggest gain in equity, with homes appreciating by $45,874.
Another component to consider with Louisville real estate investing are foreclosures. According to RealtyTrac, there were 1,338 properties in some stage of foreclosure during the month of November, 103 percent higher than the same time last year. That said, the number of REO properties (bank owned real estate) in Louisville skyrocketed during the second quarter. REO properties increased 96.2 percent compared to the previous month and 920 percent from the same time last year. The hike in foreclosures should produce a wealth of investment opportunities in the Louisville real estate market in coming years.
Louisville, KY Real Estate Market Summary:
- Current Median Home Price: $164,000
- 1-Year Appreciation Rate: 3.0%
- 3-Year Appreciation Rate: 12.2%
- Unemployment Rate: 4.6%
- 1-Year Job Growth Rate: 2.6%
- Population: 253,128
- Median Household Income: $51,371
Louisville, KY Real Estate Market (2016) — Q2 Updates:
The median home price for the Louisville real estate market was $164,000 during the second quarter, compared to the national average of $239,167. Gains in the last three years have extended the trend of positive price growth since the recession.
One of the contributing factors to Louisville’s growth in the first-half of 2016 was the local economy. While employment has held up and is on an upward trend, unemployment in Louisville is better than the national average and improving. The area recorded a 4.6 percent unemployment rate during the second quarter, compared to the national average of 4.9 percent. Local employment growth also fared well. One-year job growth for Louisville was 2.6 percent during the second quarter, compared to 1.9 percent by the rest of the country.
Home affordability was another element assisting the Louisville housing market in the first-half. Homeowners paid 7.7 percent of their income to mortgage payments, as opposed to the national average, which paid 15.8 percent. Along with being one the most affordable housing markets in the country, Louisville also remains a hotbed for new housing construction. The second quarter saw the level of construction reach 22.8 percent above the long-term average. Single-family housing permits rose to 14 percent, compared to 10.6 percent achieved by the rest of the nation. The growing pace of new housing construction in Louisville should only further enhance home affordability.
The last element for investors to pay attention to are foreclosures. The month of November experienced an onslaught of properties in foreclosures, particularly with REOs. The number of bank owned real estate in Louisville surged 96.2 percent, compared to the previous month, and 920 percent from the same time last year. With an influx of foreclosures, the Louisville real estate market should see an increase in investor activity over the coming years.
The second-half of 2016 is expected to see greater price growth in the Louisville real estate market than the national average in the next 12 months. According to the National Association of Realtors (NAR), Louisville real estate is forecasted to grow by 4.4 percent, compared to the national average of 3.6 percent. That said, the Louisville real estate market is poised for a breakout.
