Not only is there very little risk of a decline in Louisville area home values, but year-over-year price appreciation is improving.  According to the 2nd Quarter Economic and Real Estate Trend Report prepared by PMI Mortgage Insurance Company, Louisville has less than a 1% chance of seeing price declines in the next 2 years.  Further, 2nd quarter 2008 price appreciation was 3.19%.  This is an increase from the 2.88% growth during the same time in 2007. 

While 3% growth seems modest compared to the traditional 5%, it becomes significant when compared to other metropolitan areas.  Declines in areas such as Las Vegas (-17.67%), Miami (-10.68%), or Modesto (-28.53%) are driving the media frenzy.  While stable housing markets are great for buyers and sellers, the just don't make good news stories.     

What this means to you

If you are 'waiting on the bottom' before buying a Louisville area home, there is a good chance that you will end up costing yourself money and depriving yourself of happiness.  With the great selection of homes available and historically low interest rates, now is a perfect time to buy.  Keep in mind that a 1% interest rate increase can decrease your buying power by 11%.  Based on my own research and this PMI report, a 1% rate increase is far more likely than an 11% property value decrease.

Both home buyers and home sellers should expect a fair deal if the home is in good condition and move-in ready.  When selling you Louisville home, you should make repairs, clean, and declutter before listing the house.  Additionally the price must be set properly or your house simply will not sell.  As a buyer, you should expect to find sellers who are interested and perhaps even motivated to sell their homes.  This will be reflected in the condition and price of the home.  However, very few sellers are truly desperate and 'steals' are very few and far between.

In general, if you do not have to sell or are not moving up, now is not the best time to put your house on the market.  The lowered appreciation growth rate is a reflection of the fact that there is a large amount of inventory for sale.  Waiting on the market to return to equilibrium will yield a better return.  If you have to sell or are taking advantage of the buyers market and trading-up, carefully consider the advice above and contact a Louisville REALTOR, to help you properly prepare and market your home.

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search the Metro Louisville MLS.