Louisville Weathers the Housing Crunch; Beats Cincinnati, Indianapolis

My thanks to a reader who thoughtfully sent this in. The Wall St. Journal does certain things very well. One of them is their “handy-dandy” charts. The other is their in-depth analysis. This time with Shrinking Prices, Rising Delinquencies they only batted .500. This was due in large part to the chart not working properly. That’s OK, we’ll forgive them because this piece wasn’t hidden behind a subscriber log-in.

So how did we do? Since the housing market peak in the 4th quarter of 2005, the median home price in Louisville, Kentucky is up 3.2%! Now, this isn’t the 4-5% annual appreciation we’re used to seeing in our city but in a housing recession that many are calling the worst of 50 years, I’ll take it!

It’s always helpful to compare data from Louisville with other cities of similar size in our geographic region.

Relative to price at U.S. housing market peak (%)

Nashville, Tennessee 106.6
Knoxville, Tennessee 105.1
Louisville, Kentucky 103.2
Cincinnati, Ohio 99.9
Evansville, Indiana 98.2
Columbus, Ohio 97.8
Indianapolis, Indiana 97.1
Memphis, Tennessee 95.4

Turns out Louisville performs better than some, worse than others.

Louisville’s delinquency rate of 3.30 is less than the national average of 3.86 and the rate of that change also trails the national average, which is a good thing.

Should I Buy?

I’m not going to say that everyone should be buying real estate this year. It’s a complicated decision with many variables. But what I do know is that depending on your personal situation, now is a great time for families looking to move up in overall home value. In this housing market, those families will realize a substantial financial benefit. Here’s why:

“The amount you will likely lose in the sale of your current home will be more than surpassed by the amount you save on the purchase of a more expensive home.”

When you couple that fact with interest rates, assuming you can qualify, which are towards the bottom end of historical lows, making this kind of move in our market is a wise decision.

However, if your personal situation says you need to downsize or make a lateral move, then from a financial perspective, this is not the best time for you to make a move.