There’s nothing like Spring to bring out the inner homeowner in all of us. Even though housing has had its challenges over the last few years, recent surveys verify that people want to buy homes even if they are not a good short term investment. So, when someone asks me if it is a good time to buy their first hours in Louisville, I answer with a whole-hearted ”Yes.” This is not just my inner-real estate agent speaking either. Louisville is a city with a low cost of living and plenty of affordable homes.
In 2010, Forbes Magazine noted that in Louisville, owners have to spend about 20% of their income on housing. Considering that some lenders consider 25% - 33% an acceptable range, Louisville offers good value with a lower income commitment. This opens housing to more people.
Right now, there are 6005 homes for sale in Louisville. Over 70% are listed for $200,000 or less,61% are listed for $150,000 or less, and 27% for $100,000 or less. Homeowners have plenty of inventory to select from. As of March 2011, the current price-to-income ratio for Louisville is 2.67 as determined by Realtor median sales prices. A family with an income of about $58,000 could easily buy an average home priced at $155,243 and have over 3,200 homes to choose from while staying within their budget.
Louisville also boasts a low cost of living. Based on the lost food, housing, healthcare, utilities, and transportation, a transfer from Cleveland with a $60,000 salary could live well in Louisville for a comparable salary of $52,030. Housing costs are 70-80% lower than New York City, 42% lower than Chicago, 16% lower than Cleveland, and 13% lower than Atlanta, while other costs are proportionally lower as well.
Of course, to qualify for a mortgage, you must have your debt under control. Lenders want to see that your other loans and credit card debt, combined with the mortgage, do not exceed 36% of your gross income. If you are planning to buy a house, you should apply for pre-approval from the bank, which will tell you the most they will lend you based on your record. The figure the bank gives you is an upper limit. If they say they will lend you up to $175k, you can aim for a less expensive home but have flexibility in your price range.
Yield to your inner homeowner! In Louisville, it is easier to find a home you love at an affordable price than it is in many other larger cities. My team and I at Younger Group Real Estate can show you affordable homes within your budget in Butchertown, St. Matthews, The Highlands, and other great Louisville neighborhoods near the Derby. We know Louisville!