As a commercial broker, I am careful about giving advice on residential real estate. Still, I try to keep up with the residential market because after all, residential sales is an indicator of economic activity. The news of late has been reporting several promising indicators that we are emerging from the recession. Hopefully, that is the case but I would have to say that at least locally, that trend is not so certain.
On the good side, I noticed in the last week, a couple of very high end homes under construction. In the last three years there has been very little new home construction at all, so seeing some higher end homes being built seemed positive. Reinforcing this trend was a recent article in Business First in which Canfield Development says that they have had a big increase in activity over the last 3 months and have put some 14 lots under contract.
On the negative side, existing home sales seem to have dropped. This week GLAR reported only 147 home sales last week. I don't think I am exaggerating to say that existing home sales have been down pretty consistantly since all of the Federal rebate programs ended last Fall. Making things more difficult, the inventory of active home listings for GLAR has swelled to 9,104 homes on the market.
At this rate, the average Seller can expect to wait well more than a year to sell their home. This would seem to indicate continued downward pressure on existing home prices, which matches the reports I am hearing from my friends in the residential real estate world.
My guess is that we are in a transition. Market forces appear to me to be continuing to exert downward pressure on pricing but perhaps the higher end market is indicating that the tide is turning.
Have a great day, all.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
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