There’s some scary numbers floating out there about inventory levels in different parts of town, so let’s get focused and see what we can find out about homes for sale in the Louisville Highlands.  Below, we have the fairly traditional graph plotting data points on a weekly basis tracking the number of homes for sale in zip codes 40205 and 40204, as indicated by the legend at the bottom.  Not surprisingly, there are more homes for sale in 40205, and both zip codes are seeing higher levels today than at this time last year.

But let’s change it up a bit and look a different way at the same data.  On the graph below, I have plotted a year over year increase of the number of homes for sale in the Highlands.  With just the slightest amount of study, it becomes clear that the past year has not been one of the finest for Louisville Highlands homes for sale.  One full year ago, inventory levels were already well above what they have been even a year earlier with one zip code of the Highlands at 10% above and the other all the way up to 25%.  But it gets even worse!

In early May, inventory levels in 40204 rose all the way to 80% above where they were in May of 2009.  There is almost no way to have a solid real estate market with that kind of increase.  At the same time, 40205 had much lower levels, compared to the year before, but has since risen to surpass 40204, and now resides at about 50% more homes available for sale in 2010 than this time in 2009.

Homes for sale in the Highlands neighborhood of Louisville seem to be taking less time to sell, or at least leave the market, than just a few months ago.  I have graphed trend lines for homes for sale in both 40204 as well as 40205.  Even though the total numbers may be a bit different, both areas seem to be following the same rough pattern.  One year ago, both were hovering around 100 days for homes to leave the market, either through a sale, or perhaps the sellers decided to take their home off the market.  Either way, it counts the same, homes were averaging about 100 days on the market.  For both zip codes, that number rose through the year and into this past April, at which point, something seems to have happened to the Louisville Highlands real estate market, and DOM measurements started falling.

Another interesting way to look at this data is to look at median days on market, as well as average days on market, for Louisville Highlands homes for sale.  Just in case you don’t remember from your grade school teachings from years ago, the median is a point at which half of the data falls above your measurement and the other half falls below.  If you look only at averages, you will find that the really large, or really small numbers, will unfairly sway the entire data set, such as the home that has been on the market for two years without a sale.

The first graph in this article was for average DOM, but the graph above shows us the median DOM.  The basic shape of the graphs are the same, but two or three things stand out to me.  The first is the starting number of days Highlands homes for sale were staying on the market this time last year.  Instead of the 100 days average we saw, the median is closer to 60 or 70 days, over a full month’s difference.  The second observation I have is that the drop in DOM that we see in April seems to be much more extreme in the median measurement than the average.  And finally, my last point is that our measurements for today are much closer to last year’s numbers than the averages are.  That tells me that the homes that are in good shape and priced honestly are still getting sold and leaving the market in a decent time frame, but the dogs of the market are just sitting there, for a long, long time.

Asking prices for homes for sale in the Louisville Highlands seem to be trending up over the past few months.  For much of the past year, asking prices of single family homes in 40204 and 40205 have been dropping, but in May, homes in both zip codes started seeing trend lines measuring asking prices rise.  The rise in home prices has been more noticeable in 40204, where measurements have moved almost $20,000 in just two months, compared to only a $10,000 rise in asking prices for Highlands real estate in 40205.

Louisville Highlands homes for sale have seen some recent ups and downs in regards to median asking prices, but it might help to narrow down areas when we discuss the Highlands.  Most areas I cover and report on are basically the same as one single zip code, such as Prospect and 40059.  But the Highlands are different, with both 40204 and 40205 claiming to be part of the Highlands.  And to make it even more difficult, 40204 contains both some of the most expensive homes in the city, along Cherokee Parkway, as well as some of the least expensive homes, such as Germantown.

In the graph above, I have mapped out the median asking prices of the Louisville Highlands real estate market, both in 40204 (black) and 40205 (gold).  As expected, the median asking prices of homes for sale in 40204 is quite a bit more volatile than 40205.  Part of that is due to the fact that many of the homes that are active in that zip code are less expensive and are seeing more activity than the really expensive homes, which tend to sit on the market much longer.  In any case, it is interesting to note that one year ago, the median asking price for 40204 was about $255,000, much higher than we would normally expect, and has since dropped to a recent measurement of $195,000, about a $60,000 loss.

Besides price, another measurement I like to utilize when studying different parts of town is the Median Market Action Index.  Above is a graph for homes for sale in the Highlands neighborhoods of Louisville, showing the MAI for both 40204 and 40205.  A measurement of 30 would indicate a neutral market and the further below that mark we are, the stronger a buyer’s market exists.  Looking at the graph, we can see that one year ago, both zip codes were in a stronger market than they are today, which is not great if you would like to count yourself a Louisville Highlands Home Seller in the near future

The trend lines for Louisville Highlands homes for sale‘s measurement of time spent on the market has been rising for the bulk of the past year, but may have hit a tipping point a month or two ago, and now are trending down with falling numbers.  One year ago, single family homes in 40204 and 40205 were all averaging close to 95 days on the Louisville Highlands real estate market.  Those numbers have risen to 155 and 175, depending upon which zip code you are looking at, but both are now falling, with both zip codes very close to 145 days, on average, as of this past week’s measurement.

Just like other parts of town in Louisville, the number of homes for sale in 40205 is higher today than it was at this time last year.  The same can be said for homes for sale in 40204.  40204 is shown below in black, while 40205 is shown in gold.  In both cases, there haven been some ups and downs over the course of a full year, which shouldn’t be unexpected.  In the case of 40204, this time last year had about 63 available units, while the last weekly measurement came in right at 90, a pretty large increase over the course of 12 months.  40205 started out at 155 and with a bit of a drop in between, has now risen to 180, a smaller rise in percentage points that 40204, but a sizable increase just the same.

Normally, when I write a short article about homes for sale in the Highlands of Louisville, I write one article about single family homes 40204 and then another one about 40205.  But today I decided to show both zip codes on one graph so you could compare the two zip codes that together comprise the Louisville Highlands real estate market.  The homes in 40205 are shown on the gold line below while 40204 is shown in black.  It appears that both zip codes have taken roughly the same path, up a bit a year ago, then down and back up  in the last few weeks and months, with 40204 showing a bit more volatility than 40205.  Looking at the recent uptick in asking prices, in other parts of town as well, make me feel a bit optimistic that we may be nearing the bottom of the market, and even though we probably won’t see sky high asking prices for awhile, at least we might see some more recovery of values for local home sellers.

In this post I have decided to look at the median asking price of two different groups of homes for sale in the Highlands of Louisville.  One group I call new listings, those are the homes that are just coming on to the market in any given week, and are shown below in black.  The other group is the larger group of homes, all of the available homes for sale.  The difference between the asking price of the two groups can tell you quite a bit about where our market is headed.

For instance, in the sellers in the Highlands real estate market of Louisville feel optimistic that they can sell their homes, and they are seeing their neighbors sell their homes, then it is reasonable to assume that the asking price of new listings will approach or surpass that asking price of existing listings.  On the other hand, if a seller can lean out of their front door and see quite a few homes that haven’t sold for a long time, they won’t be as optimistic about selling their own house.  If you’re a pessimist, you will price your home less than your competition, and in that case, new listings will be priced less than existing listings.

Even thought the number of homes for sale in the Highlands neighborhood of 40205 has fallen each of the last four weeks, the longer term trend line, shown in gold below, still is rising, showing an overall rise in the inventory level for single family homes in 40205.  However, the speed at which the trend line has been rising has definitely slowed, and with another week or two of falling numbers, we might be looking at an inflection point and would expect to see the gold line bend down and watch as the number of homes for sale in the Louisville Highlands real estate market drops.  Check back in the upcoming weeks to see how the market behaves, and if we can push the inventory levels lower, or if we see a bit of a reversal with an uptick in the number of sellers.

Every week, Altos Research publishes measurements of the average days on market for different zip codes in the area, including the Louisville Highlands real estate market.  This past week, the number released for Highlands homes for sale in Louisville is astounding.  The average days on market dropped from just shy of 160 days to about 113 days, in just the past week!  And 40205 is not the only zip code to see a large drop in DOM measurements, most of the other parts of town I cover are also reporting deep drops in their numbers.  The best explanation I have for this latest development is that many home sellers, having tried for far too long to sell their home, have taken their house off the market after the Federal Tax Credit ran out, thinking that had been their best chance to sell their Louisville Highlands homes for sale, and once that passed, they might was well take their home off the market.  If the bulk of the homes coming off the market were homes that had been on for a really long time, and then they are no longer available, that would greatly affect the DOM for the remaining homes left on the market.

I recently received a call from an out of town real estate agent who was looking for a bit of info on Louisville homes for sale that might work for her client, someone who was thinking about attending the University of Louisville.  Since my office is only a few minutes from this home that is represented by my father, I drove down Eastern Parkway and walked through the home with my iphone and made just a simple short video.  There simply aren’t too many Louisville Germantown homes for sale, especially brand new ones, with a full basement and two car garage.  If you have any questions about this property, or any others for that matter, please don’t hesitate to contact me at greg@gregfly.com