Louisville Real Estate Market In 2023
With pretty much every mainstream news outlet predicting some type of recession for 2023, we do have some good news to offer to Louisville, Kentucky residents and home owners. According to some recent data obtained by realtor.com, the Louisville real estate market is set to dominate in 2023. This comes as many experts, realtors, and economists are predicting modest slowdowns in 2023, resulting in even Realtors being forced to look for second jobs. But, what do we mean when we say that the Louisville real estate market will dominate in 2023?
Just a few short months ago, buyers were in bidding wars. Now, real estate has seen the first monthly price decline in over a decade. Just what went wrong? Well, pretty much everything went wrong at the same time, and that is what slowed real estate. Inflation was running hot, a pandemic led to record low borrowing costs, and housing demand was exceeding supplies by the thousands. Then, suddenly, 2022 came around and saw the Federal Reserve raise rates and slow the economy. In fact, they have slowed the economy so much so that the once stable and staple investment of United States real estate is now in question.
The “Great Real Estate Reversal”
Realtor.com calls this the “Great Real Estate Reversal.” However, even as mortgage rates surge higher, prices remain elevated, and demand resides, there are a few markets that look resilient. And guess what? Louisville, Kentucky is one of those. In fact, Louisville and surrounding areas (Kentuckiana) is predicted to have the third best performance in 2023. This is largely due to the many wonderful amenities, careers, and cultures that Louisville real estate has to offer.
While buyers are having problems affording homes in most markets, Louisville has yet to see the same problem at such severe levels. In fact, Louisville and surrounding areas (Kentuckiana) have remained resilient in previous downturns as well. It is positive to see that our city has been able to stave off such a downturn so far, and it actually predicted to outperform. According to Danielle Hale, the Chief Economist at realtor.com,
“They are very affordable markets. These are areas where your housing dollars really stretch further.”
“These places did not overheat during the [COVID-19] pandemic housing frenzy over the last two years. That puts them on more solid footing. Prices and sales still have more room to grow.”
The Louisville Real Estate Market
As stated by Danielle Hale, the markets on this list are seen as affordable markets. These markets are considered affordable on the larger scale in the real estate industry because these markets offer a solid investment at reasonable prices. While the Louisville real estate market did perform extremely well in the pandemic-era, it did not perform as well as some of the top performers. This allows us to shine and remain strong while other markets that were bid up (Austin, Phoenix) see declines in prices, sales volume, and activity.
The markets on this list all have one thing in common with the Louisville area. This is the fact that all these areas are considered mid-sized metropolitan areas. These areas were not the first choices of many movers during the pandemic, but did see a fair amount of activity. This trend is likely to continue for these locations as many people move to Louisville for the careers and lifestyles it is known for. Every single one of these markets had a median home price of under $415,000 in November.
These cities also tend to have solid economies in place and, like Louisville, are located near large employment centers. In Louisville, many people move to the city to pursue work at Humana, UPS World Port, Ford, Amazon, and more. Another profession driving people to and from Louisville is the military. Fort Knox is one of the most known army bases in the world, and is located just outside the Louisville area. The military creates jobs that can be often temporary, meaning people move in and out of the area regularly.
According to Hale,
“These are the real estate markets that are going to be more active”
“If you’re a seller, it means you can expect buyers. If you’re a buyer, you can expect competition. And if you’re a homeowner, you can expect prices to rise, which gives you more equity in your home.”
While sales are expected to drop nationally by almost 20% in 2023, Louisville is expected to see a close to 5% increase in sales volume. Couple this with almost a 10% increase in home prices that is predicted, and Louisville could very easily be a top 50 market in the United States.
Louisville Real Estate Market Snapshot
Median home list price in November 2022: $290,000
Price change in 2023: 8.4%
Sales change in 2023: 5.2%
Nearly half of those looking at homes in the area were from other states, according to Realtor.com data. The area has some of the cheapest mansions in the nation for those looking for more space. It was also popular with investors during the pandemic, although that has since slowed as prices and mortgage rates have risen.
Buyers can find this brick, three-bedroom, 1.5-bath ranch home with a large deck for $275,000. Those on tight budgets can check out this newly renovated two-bedroom, one-bathroom house for under $200,000.