Today's track: S P E Y S I D E — Bon Iver

It's officially cardigan season at the Bergeron residence. I keep the thermostat a little low on purpose so I have an excuse to pick one out every morning with my coffee. The hummingbirds are fueling up for the trip south, albeit the birds have been quiet of late, and mostly retreads on merlin app. The fire pit is back in rotation. Fall is my favorite time of year, and it's not close. Cat’s are looking good this year, life is good!

Speyside is a whisky region in Scotland. They've been making Scotch there for a couple hundred years. Of course the song I'm stuck on this week is named after a place famous for aging whiskey. We live in bourbon country. It was always going to happen.

It's a quiet song. No big chorus, no drop. It just sits with you for a few minutes and lets you think.

That's the market right now. Quiet. Sitting.

But here's the thing every bourbon person in this city already knows: nothing good comes out of the barrel in a hurry. It sits through hot summers and cold winters while nobody's watching, and that's when the value gets made. The people who buy in the quiet seasons are the ones who get to taste it later.

Fall is when Louisville goes inside. Fewer Sunday drives looking at houses. Kids are in school, football's on, the holidays are coming. Every year the market takes a breath around now.

This year it's holding it.

"It was the best of times, it was the worst of times." Charles Dickens wrote that in 1859, about London and Paris. He could've been writing about Louisville this October.

In September, fewer houses went under contract in Jefferson County than in December.

December. The week of Christmas. The month “nobody buys a house.”

530 single-family homes went pending in September. August was 852. That's a 38% drop in one month, and the lowest month in the past year of MLS data. (The MLS, or Multiple Listing Service, is the database agents use to list homes.) December was 558. February was 691. September beat them both on the way down.

The reason is rates.

The 10-year Treasury is a government bond, and mortgage rates follow its interest rate more than they follow anything the Federal Reserve says. It just hit its highest level since 2002. Twenty-four years. Freddie Mac's weekly survey had the average 30-year mortgage at 7.28% at the start of October. A year ago it was 6.34%.

Here's what that means at Louisville's median price of $285,000, putting 10% down:

Same house, $161 more a month than last fall. Almost $2,000 a year. And about $674 a month more than the person selling it to you is probably paying.

That gap is the whole market right now.

Here's where the two cities come in. Not every part of Louisville felt it the same.

I pulled every single-family home in Jefferson County by price. Here's what's for sale, what's under contract, and what actually sold in the last 30 days compared to the same 30 days last year:

Months of supply, from the ground up, is how long it would take to sell every home on the market if nobody listed a new one. Under three months, sellers are in charge. Three to six is balanced. Over six, buyers run the show.

Look at the bottom and the top.

The cheapest homes in the county, under $200,000, slowed down the most. Sales are down 22% from last year, and there's almost four months of supply. That's the most buyer-friendly slice of Louisville right now.

Meanwhile, homes over $600,000 sold more than they did a year ago.

That makes sense when you think about who's buying. A lot of under-$200K buyers are first-time buyers putting down as little as possible, and every bump in the rate hits them right in the monthly payment. Investors live in that price range too, and the numbers are harder to make work at 7%. A lot of $600K-and-up buyers are moving up with equity from their last house, or paying cash. Rates matter less when you're bringing a big check.

Two cities. One zip code away from each other.

You've asked me about showings. Here's what I can tell you.

This spring, Zillow measured how many people saved or shared each listing, a pretty good read on who's seriously shopping. Louisville came in at 5.5 shoppers per listing, up 15% from the year before and above the national average of 4.8. Nationally, the most expensive homes drew 8 shoppers per listing. The cheapest drew 2.7.

So the people were looking. Harder than they were last year.

Then rates jumped, and they stopped signing. In the last week of September, 518 new homes hit the Louisville market, more than the same week last year. Only 282 sold, down 23%. For the year, listings are up 13% and sales are up just 3%.

The shoppers didn't disappear. The signatures did.

That's the opportunity. Every one of those buyers is still out there, waiting for a reason to move. If you're selling, give them one. If you're buying, move before they do.

So what do you do with this?

If you're a first-time buyer: this is the best seat you've had in years. Fewer people are competing with you under $300K. Ask the seller to pay some of your closing costs. Ask for a rate buydown, where the seller pays money upfront to lower your interest rate. Ask if their loan is assumable.

If you're an investor: under $200K is where tired sellers are piling up. I found 84 homes in that range that have been sitting more than 90 days and have already cut their price. That's not a list of bad houses. It's a list of people who are ready to talk. Run the 70% rule I walked you through yesterday and send a letter of intent.

If you're selling under $300K: price it for the buyer who exists today, not the one who existed in April. Your buyer is the most rate-sensitive person in the market. Offering to buy down their rate can move them more than a price cut, because the buydown is what changes the payment.

If you're selling over $400K: your buyers are still out there, but they're picky. Homes that show well and are priced right are still going under contract. Homes that are almost right are sitting.

If you own small apartment buildings: there are 53 two-to-four unit buildings for sale in Jefferson County under $300,000 right now. Supply is way up from last year. If you have a balloon payment coming, start that conversation now, not in March.

This isn't 2008. Almost nobody is being forced to sell, and the median price is still up from last year. It's a traffic jam, not a crash. I wrote about that Wednesday. But a traffic jam still picks inners. They're the ones who keep making offers while everyone else waits for permission.

We get every listing live on the MLS within three business days of signing. We call it the 3-Day Listing Guarantee, and we put it in writing. We answer every new message within 15 minutes. That's our 15-Minute Response Rule. And 1% of our net profit goes to Hand in Hand Ministries to build homes for families who need one.

So here's my challenge. Let's call it the October Offer.

Make one offer before Halloween. One. A full contract, a letter of intent, a lowball, a seller-financing offer, a "would you consider an assumption" note. I don't care which. Just get one line in the water.

Dickens had his two cities. We've got ours. Go pick yours, and put something in the barrel.

📊 Yesterday's poll: Which tool are you most likely to use in the next 12 months? Assumable loan won it with 50%. Lease option took 33%, and assignment or novation got 17%. "Still watching from the porch" got zero. Zero. Nobody's on the porch. And half of you picked the assumable, so you already know why I'm excited about the house below at 3.125%.

Today's poll:

Results Monday.

🏆 Rates are up, buyers are thin, and some sellers are getting tired. That's when the Top Five gets good. Every morning I rank the five best deals on the Louisville MLS and the five most ripe for a lowball, with the number I'd offer. I can't blast other agents' listings to a list, but I can send them to you. Reply "FIVE."

Warmly,
Rob Bergeron

Owner–Realtor at Award-Winning Winner Realty
Winner Realty: (502) 305-8915
Winner Realty | OffMarket.deals | Property Partner Data Company

Schedule time to discuss your goals, bottlenecks, or whatever’s on your mind — book me here.

The Morning Bergeron daily track playlist

PS: Go shopping. Here's both cities, live on the MLS as of last night:

Every active Winner Realty listing (21): including the South Louisville four-bedroom with a 3.125% assumable loan, and the Smoketown Airbnb, furniture included.

Assumable loans, Jefferson County (11): homes where you may be able to take over the seller's existing mortgage. When the bank's rate is 7.28%, that can be worth more than the countertops.

Tired sellers under $200K (84): Jefferson County single-family homes on the market 90+ days that have already cut their price. The softest slice of the whole market. Send a letter of intent (LOI) and see who bites.

Fresh price cuts, $300K to $600K (102): Jefferson County homes that dropped their price in the last seven days. If you're moving up, this is where sellers are blinking.

Two-to-four unit buildings under $300K (53): Jefferson County duplexes, triplexes and fourplexes. That's commercial property, and there's more of it for sale than we've had in years.

Every live OffMarket.deals deal: free to browse, and a free sign-up shows you every address.

Every open house in Louisville this weekend, on the Winner Realty site.

PSS: Want to run your own numbers before you make an offer? Our free tools have a mortgage calculator, a seller net sheet, a BRRRR (buy, rehab, rent, refinance, repeat) calculator and a lot more!

PSSS: Why don’t you dive into something cool this weekend and then book a time to tell me what you worked on?