Tre Pryor, Louisville Realtor® e-PRO

We saw a few huge improvements in home sales during February 2012, most notably Areas 2 & 3. Transactions are on the upswing! That’s music to many home seller’s ears.

The counter is that many are further reducing their home’s asking price to make these deals happen. We can see it in the change in average home sold values compared to 12 months ago. Even still, this does appear to be a positive situation for the Louisville housing market.

Monthly Reports: Period Ending February 2012

Huge months for Area 2 in home sales, with 61 homes sold in February compared to the previous year’s 34. Unfortunately, home prices have continued to drop bringing the 1-year trend line about $13,000 lower than this time last year.

Like MLS Area 2, Louisville’s Area 3 saw a big jump in homes sold while home prices dropped a bit. From 29 homes sold last February, to 51 this February; that’s big! You have to go back to September to find a month where more homes were sold.

Big jump in homes sold in Area 6 from the previous year and prices move up slightly. For an area that’s seen home prices all over the board, it’s difficult to predict where they might go next.

Ten more homes were sold this February than last and home prices have most likely leveled out, after an average $8,000 drop from the previous year. Still a great deal of room for improvement.

After a stellar month in January, home sales in February have dropped off for Area 8. But unlike other areas, home prices have held steady, if not slight improved the trend.

For the third straight months home sales are up in Area 9, with a 65% increase over the previous February. Home prices continue to disappoint but that could change as we enter the real estate selling season.

Area 20 saw 20 homes sold in February, just like last year. Homes are also holding their value better than many areas in Louisville.

Whenever the number of homes sold is lower, the average of homes sold can vary greatly. Just look at chart above, where the average in January was $145,000 but jumped to $224,300 the following month. Homes sold fell 2 short of the previous February.

Last year at this time, the median home price of homes sold in Louisville, KY was $131,500. For October 2011, it was $129,900. Not a big drop by the looks of it.

But that's why pictures communicate so much better than mere numbers.

The 12-month trend line has been steadily sliding since last December. The trend line is important because it takes out some of the volatility and gives a more accurate image of how house prices have truly moved. For a city where 4% annual appreciation is as expected as a horse race on the first Saturday in May, these dropping home values have shocked many homeowners.

Yes, the foreclosure crisis has even hit us here in the Derby City.

What's important to realize is that even if your home has none of the short sale or foreclosure attributes, those nearby that do are hurting your home's value nonetheless.

On the flip side, it's great for home buyers (especially anyone still renting) to take advantage of these lower prices. Don't we all shop the sales for Christmas? Why should purchasing a home at a discount not be just as enticing?

I think that some Louisvillians have finally woken up to this reality as home sales in Louisville is up over the previous year for the fourth consecutive month. There were just 551 homes sold in Jefferson County in October, 2010 compared to 638 in October, 2011, about a 16-percent increase. These improvements in the real estate market are a welcome change but 2011 still trails the previous year by a large margin. There will need to be more than 1266 homes sold in November and December in order for 2011 to best the previous year, which isn't likely.

For specific data about your MLS area, visit the LHB Housing Reports.

Study's are done all the time. They can be frivolous, somewhat worthwhile or ground-breaking. On a scale of 1-to-10, I'll give this one a 6.5.

If the question is, "When should I list my Louisville home?" The answer would be on a Friday!

According to Redfin, a Seattle-based real estate company, after analyzing 1.2 million listings, homes listed on a Friday were 12 percent more likely to sell within 90 days.

"Our theory is that since homebuyers tend to tour homes on the weekends (Saturday and Sunday have 2.5 times more tours per day than weekdays), homes listed on Fridays are the freshest in buyers' minds when they're making their weekend plans."

Not only that homes listed on a Thursday or Friday sold closer to their list price.

Who says data can't be our friend?

Homeowners who owe more money than their home is worth are considered to be under water or upside down. But data does indicate that the number of distressed properties is shrinking for the first time since the housing recession began.

It's been widely reported that shady lending practices, greedy borrowers and a general lack of wisdom (if not sneaky partisan policies) coming from our elected officials is what brought the housing crisis upon us. A more apt metaphor may be "down around our ears." Since that time, what has been done to improve the system? Have we finally passed the point of increased foreclosures or is the worst yet to come? Many say that recent legislation is a positive step in that direction.

Fellow InsiderLouisville.com Editor Terry Boyd likes to poke fun at my reliance upon data. I reply, "Numbers don't lie. Some people just like to hide the damning data." Why don't we just present the numbers at let you decide? We're complimenting your intellect that way, right? Back in May, MSNBC wrote a piece titled, Foreclosure flood may not have crested yet. While I borrowed their catchy title theme, they discredit their own premise with this excerpt.

The good news on distressed sales is that they may have peaked, according to the National Association of Realtors. Home prices continued to fall in April, and the median home price was 5 percent lower than a year ago. But the share of distressed sales shrank a bit -from 40 percent in March to 37 percent in April. (Emphasis mine)

Of course foreclosures won't stop immediately, but isn't it of primary importance that there were less in April than the month before? I would think so. Every distressed property (a home that's under water financially) is a drain on every other non-distressed property. If you are current on your mortgage payments, that short sale down the street is still adversely affecting your home's value. Wouldn't it be great that this time next year there were only one or two in your neighborhood instead of the 10 or 12 that are there now?

I think you get the picture. Here in Louisville, the number of distressed properties is much lower than in other parts of the country. Even still, CoreLogic asserts that in Louisville home prices dropped about 1 percent from July 2010 to July 2011 not including distressed sales. Including them, the number rises to 1.9 percent. Not good, but could be much worse.

Where do we go from here?

That's anyone's guess but jobs are a major concern. Inman published yesterday that Unemployment rate drops in nearly 7 of 10 U.S. metros. That's solid. Not so great is that Louisville unemployment didn't decline but held at 9.5 percent for the 3rd straight month. Until the economic outlook (including jobs) becomes more sunny, I think we'll have to endure these turbulent waters a bit longer.

I wrote a piece a couple weeks back called, Did Your Louisville Home Actually Drop in Value? In the piece, I pointed to data that showed while the National home value average dropped about 25% since the housing decline, Louisville homes actually gained 1.5%. I think it's important that people know the truth about their home's value.

Now, this doesn't mean everyone's home gained value, many did in fact lose value. Every market is a fluid situation where people, and their emotional decisions, ultimately dictate what something is worth. When you fall in love with a home, sometimes you overpay. On the flip side, job transfers and other reasons force certain homeowners to sell their home below its true value.

Why this caught my attention was because I read this interesting piece in the Wall St. Journal that claims:

More than half of homeowners are paying too much in property taxes, says Jim Kane, Chicago-based managing director of True Partners Consulting, a tax advisory firm.

Surprised? I was! Not because the government wants to appropriate money from We the People every chance they can but because the the gargantuan size of their greed. More than half?!? That's outrageous.

So what can you do? After all, Jefferson County Kentucky ranks 539th for property taxes out of 796 countiess. That's great! Our property taxes are quite low. (Another reason to sell your out-of-state friends to relocate to Louisville.)

But if you do want to get to the bottom of things, the Wall St. Journal story put a cute cartoon outlining the steps involved. Simply stated, 1) learn what value the tax assessor is assigning to your property, 2) find out what its current market value us. Then, if it's lower than the tax assessor believes, prove it to them.

The catch might be, as it is in many Louisville homes, the tax assessor values your home lower than it's true worth. The last thing you want to do is draw attention to increased value in your property. Then it would be a simple task for the tax assessor to increase your tax. But depending on your situation, you may be able to save some considerable money.

Here are a couple of examples of families that dramatically reduced their property taxes.

So there you go. A trustworthy Realtor can help you determine your homes current market value.