Louisville Home Sales in April Skyrocket

Louisville has more than the Kentucky Derby to celebrate on this first Saturday in May! Louisville home sales jumped through the roof in April 2013 compared to one year before and skyrocketed to the moon when compared to April 2011. 

The number of Louisville homes going under contract in April compared to April 2012 was up a whopping 24.22%, and up 47.63% when compared to April 2011. The numbers are equally impressive when looking at the number of homes that actually sold and closed. When we compared April 2013 to April of last year the number of homes that closed was up 23.34 % and when compared to April 2011 the number was up 41.15%.
 
Naturally the month of April in any year marks the official start of the home buying season. But the nation’s economy appears to be on track and headed full steam ahead! We’ve got a number of factors to look at: unemployment rates are down, interest rates remain under 4% on a 30 year fixed mortgage, housing prices remain lower than in past years and confidence in the economy seems to have returned.
 
Our Medley Sokoler Team hit a new sales record in April, in past years we typically put 15 homes under contract in April with signs of the economic recovery in full swing we were hoping to put 25 homes under contract in April. But we could never have expected to put 50 homes under contract in one month. We’re either close to full price offers on a number of our homes that are priced correctly and in some cases we’re seeing multiple offers on our homes.
 
As of the beginning of May we have not seen a housing shortage (already being seen in other parts of the country) but there are definitely fewer homes for buyers to choose from and homes in good condition, priced correctly and in good areas are selling quickly.
 
The one problem we are seeing stems from the appraisals being conducted by banks. Understand that appraisers have a very tough job, they’re working under guidelines established by the Obama administration handed down three years ago when the housing market was in a decline. These appraisers were told look back 4 to 6 months and no further than half a mile radius from the subject house when pulling comparative homes for an appraisal. The guidelines were not much different than in years past with one exception; they carried sharp teeth.
 
The Obama administration made it clear that if an appraiser did not follow the guidelines completely their license would be in jeopardy and finds would be imminent. That scared appraisers and as a result even today appraisers will not vary from those guidelines reinforced three years ago. So here we are today in a market seeing multiple offers which more often than not could bid up the price on a home over list price. If the house was priced correctly to begin with and multiple offers put the new sales price at $5000 or even $10,000 over list price, appraisers will be unable to find comparables to improve the new higher price.
 
What that means is home sales could fall apart because of appraisals. I’ve personally contacted the news media and asked them to report on this problem, but the concern the field may be premature. The fact that we sold 246 homes last year and our Medley Sokoler Team is on track to close some 300 homes this year gives me a much clearer picture of problems (then realtors who always sell 20 or 30 homes a year ) as they were about to occur.
 
The appraisal industry needs an overhaul immediately, regulations need to be relaxed and the Obama administration needs a complete review of the appraisal process not only for new purchases but for the refi of mortgages. The big problem is any review could take months if not years to complete. If appraisal problems occur and contracts fall apart any gains the economy has seen in moving forward could be stifled. I hope I’m wrong but at this point only time will tell.
 

April 2013

April 2012

April 2011