Lexington, KY Compared with other markets throughout the country, Fayette County continues to weather the economic slowdown and recent shifts in the housing market fairly well. This is not to say that we haven't felt the effects that have crippled other communities - businesses have closed and jobs have been lost, which can be catastrophic events in the lives of those affected.
In central Kentucky, government, higher education and health care are among the largest employers. These are economic sectors that have remained somewhat recession-proof so far. As a consequence, local property values have remained mostly flat or within one to two percentage points of their values prior to the current economic crisis.
There are some exceptions, of course. The housing boom that continued through most of the last two decades reached its peak and began deflating in mid-2007. If you purchased your home at the peak of the market and were forced to sell it today, there's a one-in-four chance that your house would not sell for more than your 2006 or 2007 purchase price. However, most of us who continue to stay in our existing houses can be confident that our property values are not in decline.
The accompanying chart is a snapshot of sales by individual neighborhoods in 2007 compared to 2008. Readers are cautioned against drawing conclusions about overall property values in specific neighborhoods. The numbers of sales in each area represent a very small sample. 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 misleading.
The transactions included in the accompanying chart are residential properties transferred via "arms-length transactions," or the sale of property from one 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.
What the chart does not indicate 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, as of July 2009, the average home spent an average of 78 days on the market. In June of 2008 the average was 77 days; during the same month in 2007 the average was 76 - compared to better times in 2006 when 58 days was the average time it took to sell a house.
The bottom line of this data is that far fewer homes are being sold. However, homes that do sell reflect a market that is relatively stable. Most of us have watched helplessly over the past year as global economic conditions have wreaked havoc on our cash investments. Fortunately, by contrast, our homes have maintained their values.
Another important consideration is that not all segments of the housing market have experienced the same effects. When analyzing the data, homeowners should always consider price per square foot. Overall in Fayette County, the average sale price of a single-family dwelling declined 0.6 percent from $190,613 in 2007 to $189,444 in 2008. And the average square footage declined 1.3 percent from 1,758 square feet to 1,734. However, the average price per square foot remained almost flat with an increase of 0.6 percent from $115.20 to $115.80.
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 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 and are encouraged to contact the PVA office. In Fayette County, the PVA office is currently working on assessments for 2010. If the assessment on your property changes in 2010, 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.
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 to anyone on our Web site at www.fayettepva.com.