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Home Sales in Greater Louisville Remain Low Despite August Gains

Homes sales in Louisville increased in August when compared to August 2010 numbers,  according to data released by the Greater Louisville Association of Realtors.

August saw over a 20 percent increase in sales when compared to the same month last year, but the housing market in the Louisville region continues to struggle compared to past year’s averages. GLAR numbers should be considered in a larger context and it’s important to look at the broad picture when considering where the market stands, said realtor Greg Fleischaker.

“I can tell you I’m the tallest person in my family and that tells you nothing. But I am. I’m the tallest person in my family, but I have two kids that are thirteen and eleven so it doesn’t tell you much. So it all depends on what you’re comparing it to,” he said.

To put it in a larger context, Fleischaker used data from GLAR and created two graphs. One shows August sales over the past dozen years, which does not tell the whole story, he said.

“August of 2011 actually brought the average up which is even more frightening, right, that our average sales have been so low that this past August actually brought the average up. So yes, we had a relatively good month in August, but that just tells you how bad the first seven months were this year,” said Fleischaker.

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PNC Plaza Sold

PNC Plaza in downtown Louisville has been sold.

A division of Optima International purchased the building at 5th and Jefferson streets for roughly $77 million.

Business First reports that the tower’s value has increased since it was sold in 2000 and 2007, and that could be indicative of increased value of downtown properties in the wake of Museum Plaza’s cancellation.

Optima International’s investment wing, Optima Ventures LLC has been purchasing buildings for years, recently buying several buildings in Ohio and at least one in Illinois. The parent company has invested in various industries in Eastern Europe.


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Realtors Hoping for Slight Boost in Sales for Summer

Since the recession began, the housing market in Louisville and nationwide has fluctuated significantly from month to month. But local realtors are hoping for a boost in sales this summer.

Greater Louisville Association of Realtors president Lamont Breland says warm weather, low interest rates and dropping unemployment can all boost sales, though he’s not expecting the market to return to pre-recession levels…ever.

“Well I hope not. Those numbers were artificial. That wasn’t real. That wasn’t reality. I don’t know what the numbers are for homebuilders, but there were probably two or three times as many homebuilders back then as there are today,” he says. “I think we’re still trying to figure out what a recovery will be, but I think a recovery will be somewhere around maybe where we were in 2009. I don’t know. It’s hard to say.”

Sales dropped in April and they’ve been low since the federal homebuyer tax credit expired last summer. Many analysts have speculated that unless buyers have reason to fear interest rates will increase, they’ll put off buying—and selling—their homes.

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First-Time Homebuyer Tax Credit Deadline Approaches

by Gabe Bullard

The first-time homebuyer federal tax credit will expire Friday. Anyone who has not owned a home in the last three years must be in a binding contract by then and close the sale by the end of June to qualify.

The tax credit took effect last year with the passage of the federal stimulus legislation. Louisville Remax Advantage Associate Broker Paul Kiger says it’s driven home sales up in the last three quarters, and the new buyers are less likely to default on their mortgages.

“People that are buying now are the solid buyers,” he says. “There’s no creative financing method out there. They’re very responsible consumers. At the end of the day it’s the banks money and the bank wants to know everything about them.”

Kiger says the tax credit has affected the entire housing market, since customers who sell their homes often use the money to buy more expensive homes. Kiger says that trickle-up effect will likely keep home sales strong once the credit expires.

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Realtors Association Optimistic About Home Sales

The Greater Louisville Association of Realtors says home sales numbers for July are encouraging.

The housing slump hit Louisville last year, causing a drop in home sales and construction. But Association Vice President Lisa Stephenson says sales are picking up, and it goes beyond the typical summer sales increase.

“As the summer months approach, the market gets better and better,” she says. “But what I’m looking at is how that curve looks compared to the way it was last year and we’re starting to see a higher peak than we saw last year.”

Stephenson says June sales showed signs of improvement, and July 2009 is shaping up to surpass July 2008 in total sales. She attributes the slight recovery to growing comfort with the economy and the increase in the new home buyer’s tax credit.

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Mall Owner Ends Negotiations With Bondholders

The owner of  Louisville’s Oxmoor Center and Mall St. Matthews is no longer negotiating with its bondholders for a reprieve of debt payments.

General Growth Properties owns some two hundred malls nationwide and two weeks ago missed a payment deadline on $395 million in bonds.

Company officials declined to comment on the air, but say the company is continuing talks with other lenders and bondholders.

Louisville commercial real estate attorney Barry Hines, who’s not connected with the company or its bondholders,  says General Growth’s financial troubles are caused more by the difficulty in the financial market than a drop in consumer spending.

“For the most part, my understanding is the underlying income stream from these malls is healthy and is sufficient to service the debt,” says Hines. “Their big problem is they can’t find enough money out there in the debt marketplace from lenders who are actively making loans in order to repay the debt that is blooming.”

Hines says the company can file for Chapter 11 bankruptcy and restructure its debt, but it may be forced into Chapter 7, which would lead to the liquidation of property.