Louisville's area's home sales rise sharply in July

Article written by: By Gregory A. Hall • ghall@courier-journal.com • July 28, 2009

Buoyed by the $8,000 federal tax credit for first-time homebuyers , Louisville-area home sales so far this month are up sharply over the same period a year ago.

The improvement — coming on the heels of June numbers showing an uptick over May — is an indication that as the nation's housing market shows signs of recovering, Louisville is gaining with it.

“The first-time homebuyers are making a huge, huge dent in the market,” said Jan Scholtz, president of the Greater Louisville Association of Realtors.

Sales through Monday were up 27 percent over the same period a year ago, said Lisa Stephenson, executive vice president of the Realtors association.

The 1,042 homes sold in July through Monday had already exceeded the 1,015 for the entire month last year, she noted.

Both nationally and locally, the tax credit is being cited as a significant factor in the market's improvement.

The credit is part of the federal stimulus package passed in February and applies to homes bought before Dec. 1.

Realtors say the hope is that as first-time homebuyers help the low end of the market, existing homeowners will be able to sell and move into larger quarters, stimulating sales among the higher-priced homes.

Joe Simms, owner of the Joe Simms Group RE/MAX Associates in eastern Jefferson County, said he tried Tuesday to set up appointments for a client and found four of the seven homes he planned to show had sold.

Because so many of the buyers have been purchasing starter homes, prices still are down, he said, but still, “we've been real busy. … We've had a great month, and I think most of it's due to the $8,000 tax credit.”

Earlier this month, the Louisville Realtors group, which draws chiefly from Jefferson, Bullitt and Oldham counties, reported its members sold 1,175 homes in June, the most since a year earlier and only 1.3 percent fewer than June 2008.

Southern Indiana Realtors reported selling 285 homes in June, a 13 percent increase from a year earlier.

Scholtz said she expects the local market to grow in coming months because consumers are more confident than they were when the housing and financial crises developed. “It's going to continue to gain like this,”Scholtz said. “We are going crazy selling houses to first-time homebuyers.”

Stephenson did not reveal median price figures for July, but agreed with Simms that prices are not up. With so much of the recent activity being among lower-priced homes, median prices haven't been as quick to rebound.

Nationally, sales of new homes rose by the largest amount in more than eight years last month, according to a Commerce Department report this week. Sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the government reported.

Low prices and historically low interest rates —– averaging 5.20 percent nationally for a 30-year fixed rate —– have also contributed to sales increases.

“The worst of the housing recession,” said David Resler, chief economist at Nomura Securities, “is now behind us.” And as with the overall economy, the “recovery” is likely to be slow and arduous, he said.

Last week, the National Association of Realtors said that sales of existing homes posted a monthly increase of 3.6 percent in June.

Also, home prices in May posted their first monthly increase nationwide since the summer of 2006, according to data released Tuesday in the Standard & Poor's/Case-Shiller home price index of 20 major cities. The index rose 0.5 percent from April, but was still 17.1 percent below May of last year.

Louisville is not part of the index, but Realtors' figures showed a median Louisville price of $137,000 in May, up 1.1 percent from a year earlier. The median slipped to $136,000 in June.
“I think people are tired of waiting and the rates are still decent,” said Louisville Realtor Sandy Gulick. “I think people have gotten off the fence. I just think that the country is feeling a little bit more comfortable … ”

Reporter Gregory A. Hall can be reached at (502) 582-4087. The Associated Press contributed to this story.

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