Snow, freezing temperatures and ice on the roads did little to stop Louisville home buyers last month. New Louisville home sales numbers for February 2015 are more than encouraging, they are downright exciting! The number of homes going under contract last month was up an impressive 16.9% (last month the number was 26.3%) from the same period a year before. The new Greater Louisville Association of Realtor numbers indicate five things:
1) Interest rates are low.
2) There is fear those rates could increase.
3) FHA financing costs have come down.
4) Credit score requirements have been reduced.
5) New loans are making it easier for buyers to get a mortgage.
Combine the 5 reasons and buyers are jumping off the fence and into a search for homes.The news is not all good, the number of homes actually closing was down .02 percent from a year ago. Once again the reasons for slowdown in the closing process is three fold:
1) Mortgage companies are swamped, the info required for a buyer to become approved for a loan is still lengthy. Even a 1 day delay in producing documentation could slow the approval process weeks.
2) Home inspections are finding problems, some of them weather related. Ice is forcing roof issues, melting snow is seeping into basements and that’s just the start of the nightmares.
3) Home appraisals are still conservative. Some homes are not appraising and the contract can easily fall apart.
The number of homes going under contract could have been higher of there were more homes on the market. The number of homes on the market is actually down 11.4% compared to a year before. The number of homes coming onto the market in February was down 1.2% from a year before. All this means we could have seen more homes sold last month.
As Realtors, we measure the number of homes coming on the market against active buyers with the words “absorption rate”.
We look at the numbers this way:
1) Imagine no new listings were to come on the market.
2) The same amount of buyers remained in the market.
3) The number of months it would take for all homes on the market to be sold would equal the the absorption rate for a city.
The Louisville absorption rate was 4.45 percent (last month the rate was 4.67%). Here’s what that means:
1) An absorption rate above 6% is generally considered to be a buyers market.
2) An absorption rate from 5-6% is a neutral market.
3) An absorption rate below 5% is believed to be a sellers market.
The absorption rate is down a full 10.82% from a year ago. The numbers show a strong sellers market and now is the time for potential sellers to put their homes on the market for a quick sale and top dollar.
For buyers a serge of new homes will come on market within weeks. The good ones priced correctly will sell very quickly. Homes overpriced or not in the best condition will take longer to sell.
It doesn’t matter of your a buyer or seller now is the time to contact us. We’re ready to help. Call (502) 376-5483 or email firstname.lastname@example.org.