Good luck getting home in trendy area for $165K

Tommy Johns knew before he toured a single home starting late last fall that he and his girlfriend would feel most at home in Germantown, the neighborhood on the north side of Eastern Parkway that's become a big draw for young professionals. 

Recent commercial development and a concentration of modest bungalows and shotguns made it a great place to invest, said Johns, 28, who operates a bar and eatery in Butchertown.

But it wasn't easy finding something where the prices have shot up and several prospective buyers are ready to pounce when a property pops up online. 

"We worked on finding a place for quite some time," Johns said, and "we went into the search assuming it was going to take awhile." 

Louisville-area real estate agents say it's a positive sign that millennials like Johns and young families are venturing into the market for the first time or returning after several years when the housing crash forced lenders to tighten mortgage credit. 

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The bonus for people mulling home ownership in this region now is the same as before the recession. Homes are lower priced than in many mid-sized cities, a fact highlighted by WalletHub, a personal finance website. Last year, it ranked Louisville 15th out of 300 communities in a measure of best and worst places for first-time buyers, based on affordable home prices, property taxes, crime rates and an array of other factors.

Louisville always has been more affordable, said Sharon Duncan, a veteran agent now with the Remax office in Jeffersontown. "When other areas of the country were accelerating, Louisville remained steady. I think to this day we enjoy that,” she said.

Homes affordable for first-timers

Leaders of area real estate groups say that the local median price, which is about $165,000, is low enough for first-timers paying rising apartment rents of $800 to $1,000 a month to transition without experiencing a huge hit to monthly expenses, as long as they can pull together the cash needed for a down payment and closing costs.

The hitch is that inventories of homes for sale are low, and places that new buyers seek out – Crescent Hill, St. Matthews and the Highlands – have few houses near $165,000.  

In those areas, "you’re not going to see $170,000 to $180,000 unless it’s a complete teardown,” said agent and investor Bob Sokoler.  

The Courier-Journal examined more than 200 property sales from the first half of the year between $160,000 to $170,000. Just a dozen were located in 40204 through 40207, and in many instances, the buyers faced spending thousand of dollars to modernize properties. The pitch, for instance, on a century-old triplex in the 100 block of South Pope Street in the Clifton neighborhood said that it offered "an opportunity to take on a big project and make some money."

Any buyer looking to renovate it completely would also spend an estimated $50,000 to $100,000, the seller's agent said in the listing. It sold for $167,500 in April.

Because multiple bidders are submitting offers on properties, it's common for sellers to wind up getting more than their asking price, even if the property is a fixer-upper. Of the 211 homes and a few condos that sold, 58 went for prices that exceeded the list price. 

Hot properties go quickly

That trend isn't expected to change anytime soon. Homes recently priced between $150,000 to $175,000 in two MLS areas stretching from Butchertown to St. Matthews and Germantown are really scarce, said John Fischbach, a Remax agent with the Joe Simms Group, adding that “the inventory is very low.” 

During June, 21 new listings popped up and 15 sold in those areas almost immediately, he said, which means that “unless it needs a complete renovation or is noticeably overpriced, it will sell in a day or two.”

As buyers have widened their search, they’re heading to Germantown, selected neighborhoods in the South End and across the Ohio where prices are still under $200,000.

The fact that Tommy Johns settled on a place that fetched $168,000 amazed his grandfather, Thomas P. Johns, who helped his grandson find his place on Ash Street. 

"The strange thing is, you could have bought the same house for $50,000 to $60,000 less five years ago," the elder Johns said, "(but) this one was move-in ready."   

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Buyers heading farther from the old city limits can find larger homes on bigger lots, but there's still stiff competition among buyers. Take the four-bedroom, two bathroom home on Camille Drive in the Fern Creek-Jeffersontown area that Duncan placed on the MLS site one weeknight in late July.

Formerly a foreclosure property, it was completely renovated and listed for $148,900. After it hit the listings site at 10 that weeknight, she said, the owner had a contract and accepted the offer by the next afternoon.

Some zones see more activity

Many of the recent sales near $165,000 were scattered south of the Watterson Expressway, in Shively, on Southern Parkway near Iroquois Park, Highview, Jeffersontown and Fern Creek. Finding a three-bedroom home with a garage at that price is possible in those areas, as well as in some subdivision developments in Bullitt County, and in older neighborhoods in New Albany and Jeffersonville in Southern Indiana.

Also, “there are areas that we’re seeing come alive again – Hikes Point, J-town and Lincolnshire,” said Eddie Kidwell, a Semonin agent who was referring to a neighborhood between Browns Lane and Breckenridge Lane south of the Watterson Expressway.

The median price for all areas in January to June 2016 nudged up 1.9 percent compared with last year. Jefferson County’s average home price in June was $207,619 and the median was $168,000, which is often a bit higher during the summer when sales increase.

For Tommy Johns, who closed on his two-bedroom in May, the place is beginning to feel like home. "There's a lot in the way of places to go," he said, "and it's by far the most walkable area I've ever lived in."

Reporter Grace Schneider can be reached at 502-582-4082 or gschneider@courier-journal.com.

Home prices

$165,000 - Area median price for first half of 2016 

$168,000 - Jefferson Co. median price for first half of 2016 

$207,619 - Jefferson Co. average price

The median price means half the homes cost more and half cost less.

The average price is derived by adding the sold prices together and then dividing by the number of sales.