Lexington, KY - For the second consecutive year, Fayette County has weathered current economic conditions and housing market shifts better than many other regions around the nation.
Unlike cities that depend heavily on manufacturing, transportation and other industry segments harder hit by the recession, central Kentucky counts government, higher education and health care among its largest employers. These are economic sectors that continue to be somewhat recession-proof. As a consequence, sale prices for single-family homes have remained mostly flat or within 1 or 2 percentage points of their value prior to the current economic climate.
The accompanying chart is a snapshot of sales by individual neighborhoods in 2007, 2008 and 2009. Readers are cautioned against drawing conclusions about overall property values in specific neighborhoods because this represents a very small sample size. One or two sales where a homeowner realized an unusually high capital gain or loss would cause anomalies in such a small sample size, making the percentage of change from one year to the next misleading.
The transactions included in the accompanying chart (on page 17) are residential properties transferred via "arms-length transactions," or the sale of property from one unrelated party to another. The data does not include transactions involving transfers of property between family members, foreclosures, refinancing records or other atypical sales; nor does it include commercial and multi-family dwellings.
The bottom line of this data is that once again, for the second year in a row, roughly 25 percent fewer homes were sold. However, homes that do sell reflect a market that is relatively stable. Unlike our 401Ks and individual stock investments, our homes have maintained their values.
In Fayette County, the average sale price of a single-family home increased 2.4 percent from $189,444 in 2008 to $194,075 in 2009, after declining slightly from 2007 to 2008. When comparing sale prices, consumers should also consider square footage and price per square foot - to truly compare apples to apples. In 2008, we saw a slight decline in the size of houses sold, which was offset by the decline in average sale price. However, in 2009 there was an increase in all three indicators. In addition to average sale price, average square footage increased by 1.2 percent from 1,734 square feet to 1,756, and average price per square foot increased from $108.43 to $110.50.
What the chart does not show, but is also good news, is how fast Fayette County homes are moving once they are on the market. According to the Lexington-Bluegrass Association of Realtors (LBAR), which operates the region's multiple listing service, to date in 2010, a typical home spent an average of 67 days on the market before it sold. This could be a significant indicator of better times ahead, at this point in 2009 similar homes spent 78 days - 14 percent longer - on the market. In 2008 the average was 77 days; during the same period in 2007 the average was 76. In 2006, which were much better times for our local real estate market, 58 days were all that was required to sell a house.
The property valuation administrator (PVA) is required by statute to inspect each parcel of real property in the county once every four years. Additionally, the PVA is required by law to evaluate property assessments annually, and to adjust individual assessments when sales in an area are not within 90 percent of current assessments. Typically, but not always, reassessments occur every four years at the time the physical inspections occur. The chart also indicates which neighborhoods are up for inspection and possible reassessment for the upcoming tax year.
If a homeowner does not agree with their property assessment, they have the right to disagree with the PVA assessment. Homeowners are encouraged to contact the PVA office to begin this process. Currently, in Fayette County, the PVA office is working on assessment for 2011. If the assessment on your property changes for 2011, you will receive a notice by mail in mid-April. In the spring, through the third week of May, you may conference with the PVA and discuss your assessment. If you have information that indicates that the property is assessed too high, the PVA may make adjustments. If, after the conference, you are not satisfied with the assessed value, you may appeal to the local board of tax appeals.
David O'Neill is the Fayette County Property Value Administrator. All of the information from the accompanying chart originated with the Fayette County Property Valuation Administrator's database. PVA data and information on challenging your property assessments and the work of the PVA is accessible at www.fayettepva.com.