2015 Real Estate Assessment: Late-year boom left 2014 with more growth than expected

By all appearances, the Lexington housing market continues to strengthen after emerging from the recession three years ago. As 2014 drew to a close, it intially appeared that the number of homes sold in Fayette County had leveled off and that 2014 numbers would merely mirror those from 2013. Instead, the market rallied sharply in December – at nearly pre-recession levels – to finish the year strong, ushering in a welcome trend that has continued throughout the first half of 2015.

Many market watchers assumed that home sales had become stagnant, due in part to the Fayette County Public Schools’ redistricting process, which began in April 2014 and still had a great deal of work remaining by year’s end. Prospective homebuyers, it was theorized, had delayed their purchasing decisions until the new school boundaries were drawn and finalized by the school board, thus dampening what otherwise would have been a more robust market.

Home buying, for most of us, represents the most significant financial decisions we will face in our lifetimes, and which schools our children attend is a critical factor in those decisions. So it seemed reasonable that the housing market could be hampered by a lengthy redistricting initiative, as theorized by the local realtor association, homebuilders and this author, all of whom were represented on the redistricting committee.

But when the final 2014 numbers were crunched, December home sales had increased. And they didn’t merely increase – they jumped a shocking 36 percent over the previous December, allowing 2014 to inch ahead of 2013. It was a slim margin – a scant 56 homes – but an increase nonetheless, and one that either disproved the “patient buyer” theory or signaled a new trend in consumer demand.

Home sales, remodels and other improvements, and modest appreciation in certain neighborhoods have allowed the overall value of Fayette County’s 110,000 parcels of property to grow by a modest 1.8 percent heading into 2015, with a total property tax roll of just under $24 billion.

Increases in the number of houses sold, as well as the sale prices, have resulted in an increased number of reassessments over the past two years in several neighborhoods, including downtown historic areas, Kenwick, Bell Court, Harrods Hill, Hollywood Terrace, Lansdowne, Glendover, Lakeview, Castlegate and Greenbriar.

Neighborhoods that are experiencing similar trends in appreciation and that appear to be on track for PVA reassessments over the next couple of years include Meadowthorpe, Aylesford, Holiday Hills, Chevy Chase, Shadeland, Taborlake, Ashland, Montclair, Mr Vernon, Brookhaven, Seven Parks, Southland, Hill N Dale, Pine Meadows, Harrods Hill, Hidden Springs, Harrods View, Wyndham Hills, Ashmoor, Heartland, Rabbit Run, Palomar, Clements Heights, Andover, Plantation, Fairway, Lakeview Island, Open Gates and Beaumont. PVA staff will be inspecting about 80 residential neighborhoods during the second half of this year.

The Property Valuation Administrator (PVA) is required by statute to inspect each parcel of real property at least once every four years. This monumental task is accomplished by subdividing the county into approximately 300 neighborhoods, a fourth of which – nearly 30,000 homes – are inspected each year. Additionally, the Kentucky Constitution requires PVAs to assess all real property, not otherwise exempted, at 100 percent fair cash value every year. Typically, but not always, reassessments coincide with quadrennial physical inspections. The accompanying real estate chart indicates with an asterisk the neighborhoods that are to be inspected and possibly reassessed during the upcoming tax year; more detailed and comprehensive information about the 2016 physical inspection process can be found on the PVA website (www.FayettePVA.com).

An assessor from the Fayette County PVA Office will visit each property, take a new photograph, look for changes since the previous inspection, grade the condition relative to the neighborhood and look for other conditions including utilization, vacancy, abandonment and blight. PVA staff do not see the inside of homes, but by law may enter backyards to inspect additions, improvements and take measurements. These inspections are a vital component to the reassessment process.

If a homeowner does not agree with their property assessment, they not only have the right but are encouraged to contact the Fayette County PVA office, which is currently working on assessments for the 2016 tax year. If the assessment of a property changes between 2015 and 2016, the property owner will receive a notice by mail in mid-April. These notices are also available online by viewing and individual parcel’s record at FayettePVA.com. Property owners may conference with the PVA and discuss their assessments, beginning on the first Monday in May and continuing for 13 consecutive days (the next conference period will be May 2-16). If a property owner remains unsatisfied with the assessed value after conferencing, they are encouraged to appeal to the Local Board of Tax Appeals.

The accompanying chart is a snapshot that compares home sales in individual neighborhoods from 2009 through 2014. Readers are cautioned against drawing conclusions about overall property values in specific neighborhoods where the number of sales in each area represent very small sample sizes, and therefore may be misleading; for example, one or two sales in which a homeowner realizes an unusually high capital gain or loss would cause anomalies in such a small sample, making the percentage of change misleading.

The transactions represented in the data, are single-family residential property sales that the PVA office has determined to be arms-length transactions, or the sale of property from a willing seller to a willing buyer given a reasonable time on the market. The data does not include transactions involving transfers of property between family members, foreclosures, refinancing records, or other atypical sales; nor does it include sales of commercial, condominium, townhouse, duplex and multi-family dwellings. Similarly, building permit data includes only those initiatives that add value to property and exclude items such a sidewalk and driveway repairs and privacy fences.

All of the information from the accompanying chart originated from the Fayette County Property Valuation Administrator’s database. PVA data and information on challenging your property assessments and the work of the PVA are accessible at FayettePVA.com.

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