Trends to Watch in 2020

Will 40291 Again Be The Most Popular Zip Code in Louisville? There were 773 real estate sales in 40291 in 2019 making it the most popular zip code in the Louisville MLS area by number of transactions. Bisected by the Gene Snyder Freeway in southeastern Jefferson County and close to The Parklands’ Broad Run Park, the average sale price was $225,449.

Historically Low Mortgage Rates Will Continue – Leading housing economists suggest that 30-year fixed mortgage rates should stay around 3.8 percent for 2020.

Low Rates Give Buyers More Purchasing Power But Inventory Remains Elusive – In relative terms buying power has increased to historically high levels but there is still a shortage of inventory. In Louisville, the absorption rate has hovered around 3 months of inventory for the last several years and is even less, sometimes fewer than 2 months, for houses under $200,000 (A balanced market – one favoring neither sellers nor buyers – has six months of available inventory). New construction starts are still a fraction of what they were a decade ago and the new homes that are being built tend to be more expensive and suburban, outside the more urban, walkable neighborhoods favored by younger buyers.

Generational Buyer/Seller Dynamics – According to Realtor.com Chief Economist George Ratiu the largest population cohort in the country (those born in 1990) will turn 30 in 2020 and represent 4.8 million people hitting peak home buying age. “As a group, these Millennials will take more than half of...

From Business Insider: Why is the housing market so different for millennials compared to the one their parents and grandparents faced? In large part it's because of how much housing costs have risen, but it's also because of the student debt with which many members of the generation are saddled. Some 70% of recent college graduates finish school with an average of $29,800 in debt to repay, plus the inevitable interest. Read more.

From GQ.com: Horses are a minor footnote in Hunter S. Thompson’s 1970 article, “The Kentucky Derby is Decadent and Depraved.” The piece is less about what Thompson saw than what he hoped to see––the depravity that exemplified the culture of his hometown; the brouhaha, the drunken Kentucky colonels identifiable by whiskey-stained linen suits, but clean shoes. Read more.

From CityLab.com: When most people think of housing, they separate it into two types: single-family suburban homes that people own, and apartments, largely in cities and urban centers, that people rent. Until recently, the popular image was more or less correct. Most single-family houses provided homes for the families that owned them. Read more. 

Great video on all the cool things happening in Louisville's Butchertown Neighborhood:

Where will you get the best return on investment when renovating your house? Watch this short video to see six upgrades that will increase the value of your home.

From CNBC: Billionaire Andrew Carnegie famously said that 90% of millionaires got their wealth by investing in real estate. We wanted to know: Is this still true? Is investing in real estate still a good idea? According to these nine Advisors in The Oracles, who made millions by investing in real estate, the answer is a resounding yes. Read more.

From Forbes.com: Since ancient times, humans have lived in communities, and humanity has thrived by grouping. What New York is today for the world — arguably its capital — Rome was for the Roman Empire and Constantinople was for the Ottoman Empire. Cities have been hubs for creativity, economic activity and the evolution of humanity. They symbolize freedom, culture and civilization. Today, cities are evolving faster and faster. Read more.

From lendedu: Have bad memories from the 2008 financial crisis or even a lack of knowledge when it comes to mortgages prevented millennials from becoming homeowners? How long do millennials anticipate it will take to finally own a home, and will they put off other life goals to buy one? Read more.

From Architectural Digest: When philanthropist and art collector Steve Wilson and his wife, Laura Lee Brown, first dreamt up the 21c Museum Hotel in Louisville, Kentucky, it was conceived as a one-off. Located in the city's historic district, the hotel also serves as a means to share the couple’s love of art, as well as their impressive and ever-growing collection (which is as challenging and progressive as anything New York has to offer), with a wider, underserved audience. Read more.

From Realtor.com: As we closed the books on May, even the hottest real estate markets in America were just coasting along, with the typical property selling no faster than at the same time last year. And with buyers on the lookout for affordability, smaller metros in the Midwest and Northeast outshone the more glamorous but high-priced California markets—topped by an unexpected name, an analysis of realtor.com data for the month shows. Read more.

Welcome to this magnificent River Glen Estate with breathtaking views of the Ohio River on almost five acres of land. Designed by renowned Louisville architect Timothy R. Winters, this property is modeled after New England style-architecture as can be seen from its gorgeous display of white cedar shingles. Distinct features include two master suites, a chef’s kitchen, a four-car garage, two laundry rooms, a central vacuum system, a pool and a screened in rear patio to take in the Ohio River views. Read more. 

From Marketwatch.com: Home prices are on the rise, climbing another 3% year over year, according to S&P CoreLogic Case-Shiller 20-city home price index from February released this month. Still, that growth is slowing and some experts are predicting that we’re increasingly entering a buyer’s market. And that means sellers who want to get a premium for their home may have to work for it. Read more.

Homebuyers Ben and Sara Doninger could write their own chapter of a book outlining the pitfalls of Louisville’s fast-paced residential market. The recently married couple spent roughly three months vigorously searching for their first home, only to be hit with one false start after another. “We didn’t know what to expect. We heard our friends say it was pretty brutal. As soon as you see a house, you need to jump on it,” said Sara, an assistant treasury management officer with Republic Bank. The couple, both of whom are young professionals, mapped out a plan to find a home in some desired locations, including Jeffersontown and Hikes Point. Read more.

From RealtorMag: From the layout of the kitchen to the colors of the paint, a home’s interior space can affect people in a variety of ways, both positive and negative. Distaste for the way something in a home looks can even raise your levels of cortisol, the stress hormone associated with a wide range of health problems. Read more.

From HouseLogic: The first thing you need to know about home inspection: You’ll feel all the feels. There’s the excitement — the inspection could be the longest time you’re in the house, after the showing. Right behind that comes … anxiety. What if the inspector finds something wrong? So wrong you can’t buy the house? Then there’s impatience. Seriously, is this whole home-buying process over yet? Not yet. But you’re close. So take a deep breath. Because the most important thing to know about home inspection: It’s just too good for you, as a buyer, to skip. Here’s why.

The first half of the 2018 Louisville real estate market was marked by home prices continuing to rise faster than a porch thermometer on a sweltering July afternoon. From January 1 through June 30, the average sale price across the Louisville market was up 5.8% to $217,101 (from $205,194 for the same period in 2017). The median price was $177,500 vs. $169,900 a year ago. For the month of June, that average sale price was a staggering $237,458 (five years ago in June 2013 the average sale price was $195,411).

Rising home prices continue to be driven by a shortage of inventory. For the entire Louisville MLS (multiple listing service), the inventory of available properties was 7% lower than for the first half of 2017. The total number of homes sold from January 1 through June 30, 2018 was 8,516 vs. 8,706 or 2.2% less than the same period in 2017. The inventory situation may be improving slightly according to the industry association the Greater Louisville Association of Realtors (GLAR). 

Interest rates have risen modestly and mortgage rates have followed suit with a recent 30-year fixed rate at approximately 4.5% according to Bankrate.com (this compares to about 4% for this time in 2017). Most analysts expect rates to continue to rise gradually through at least the end of 2019.

In its mid-year market analysis, GLAR reported more than 4,000 properties for sale at present compared to 3,000 just a few months ago. As has been the case for the last few years, move-in ready homes under $250,000 continue to set the pace and are selling quickly, often in multiple offer situations.

The high-end market also continues to be robust with 347 sales of properties between $500,000 and $999,999 in 2018 vs. 320 for the same period in 2017. Sales of properties priced at $1 million plus also showed limited growth with 41 sales in 2018 vs. 37 in 2017.

The question on most consumers’ minds seems to be: How long can this bull real estate market...