The Louisville Real Estate Sky Is Not Falling

Despite record temperatures and fear of a faltering economy, Louisville Homes going under contract for the month of July 2011 actually increased almost 11 percent from the year before (see data below). The numbers may be artificially low for July of 2010 because many homebuyers had purchased a home earlier in the year thanks to federal tax incentives. Still the trend from year to year shows some positive signs.

For example the July 2011 homes going under contract numbers are only off 2.5 percent from July 2009. Better yet 2011was actually up 20 percent from 2008. You can make the argument that these are the bad years, recession, foreclosures, short sales and bank bailouts. But The past 3 years are actually the new normal. The good old days are gone, we can only hope for their return.

So imagine my surprise tonight when I read a fellow realtors’ blog explaining to his clients that home prices are off 15% over the past 2 years. Maybe in select sections of Louisville, but according to the new Greater Louisville Association of Realtors data released today, July 2010-2011 median home prices remained the same. Additionally the average sales price of homes increased almost $3000.

The numbers are not all good! The number of homes that closed was actually down 5 percent from July 2010-2011. That may be a sign of a bigger problem. We’re seeing a disturbing trend with appraisers. Appraisals are coming in low in some areas of town. That’s a concern because even if a home sells for a decent price, an appraiser may feel the property is not worth the value of the contract. We’ve had it happen to us 6 times in the past year. I’ve had to challenge the appraisal each time and I’ve won 5 out of the 6 times.

So to all my fellow realtors here’s the recipe to challenge a low appraisal.

1. Ask the buyers agent and buyer if you can challenge the appraisal to the bank and appraiser.
2. If the answer is yes, ask your seller to immediately put together a list of all upgrades they’ve done to the home while they owned it (in a list form) with the cost of the upgrades.
3. Check the comps used by the appraiser for foreclosures and short sales. If necessary call the listing agent on those comps to find undisclosed data.
4. Nicely put together an e-mail showing your comps and an explanation of why they should be used along with the upgrade sheet provided by the seller.
5. Remember as my mom use to say you get more with honey than you do with vinegar. The appraisers are use to people yelling and arguing with them. Be nice, explain your case, it may save the deal.

July 2011

July 2010

July 2009

July 2008

Bob Sokoler is a former Anchor/Reporter turned Louisville Realtor 7 years ago in Louisville Kentucky. You can learn more about Bob, his Team and Louisville Real Estate at www.weselllouisville.com