We were moving along, making steady progress: 859 in May… 859 in June… 851 in July… then *bam* 1,016 homes sold in August! Check out this Louisville home sales chart.
Looking at this chart, which easily lets us see how each month compares to the same month in previous years, it’s striking. August 2012 was the 6th best month in the past 6 years!
Putting it another way, if we remove the top 4 months, all of which took place in 2007 (and before the housing recession) August was the 2nd best month in this sample. Only June 2010 beats it.
So we have this very positive news. Along with data that new construction is picking up across the country. What comes next?
Going Forward and The Election
According to David Cross, a writer for Movoto, election years are bad for home prices. His data suggests:
For the three years surrounding the presidential election (the year before, during, and after), we noticed that:
- The year before an election home prices rose by 6 percent.
- During the election year home prices rose by 4.5 percent.
- After the election year home prices rose by 5.3 percent.
Louisville, Kentucky generally follows near the end of a trend. If perhaps we’re 1 year behind, we could be experiencing a bigger gain in home prices this year. Then in 2013, we would take the hit.
It’s my personal belief that as more Americans see how our government makes financial decisions—massive debt, increased spending, etc.—we lose confidence. Lost confidence means less change, which in turn means fewer home purchases.
It’ll certainly be interesting to see how the 2012 election will affect the Louisville housing market.