Louisville New Construction Home Prices in 2015

We hear it all the time. Louisville new construction prices just keep going up, up, up! I’m looking at the numbers and it appears that this is the case.

Photo of a Louisville new construction home in Norton Commons
Since its launch, Norton Commons has led our city with the highest price per square foot for Louisville new construction.

What is happening here in Louisville, isn’t unique though as new construction prices are up all across the country. The ingredients needed to build these new homes have risen steadily for the past decade, even while wages have remained fairly stagnant.

I decided to dig into the Greater Louisville Association of Realtors (GLAR) database and see what I could find.

Louisville New Construction Prices on the Rise

Before the housing recession, there would be more than 1,000 new construction homes sold via our MLS each year. We’re not including condos in this number, just single-family homes. For 2007, that number was 1,439. Wow. Just one year later than number drops 59%!

At the same time, there’s no law that says a builder must list their home on the MLS. Therefore, the actual number of new construction homes sold is higher, potentially much higher. We can only run with the available data.

Let’s take a look at the stats!

 Number SoldAvg. Sale PriceAG SqFtSold Price/SqFt
The data for 2015 is incomplete.

Notice that the average above-grade square footage hasn’t really changed from 2008 to today. Consumers are buying basically the same-sized home. But the price to build this home has gone up about 20 grand. To be honest, I expected to see an even greater difference.

During the housing recession, builders were putting fewer and fewer “bells and whistles” into their homes as homeowners wanted as much space as possible for the least money.

Once we turned the corner, the nicer finishes became less of a wish list items and more of a “must have” items.

Chart of Louisville New Construction Sale Prices and Sold Price Per SqFt
This chart of Louisville home sales is only for new construction single family homes. As you can see, new construction prices continue to move higher since the housing recession.

We expect these numbers to increase.

Wages are only expected to account for a 3% increase but raw materials have been soaring. Concrete, in particular, has increased in cost dramatically since April.

What I tell my clients is that buying a Louisville new construction home is like paying retail. You’ll never get a deal and depending on where you’d like to be, you can pay a premium. But what you get is brand new and exactly want you to want.

Next time you look at a home for sale, take special note of its above grade price per square foot. Then come back to this article and see how it compares to our current $135.56 per square foot.

Of course, larger lots, high-end appliances, and luxury finishes greatly increase this number. But I’m sure you already knew that.