Finally, there is good news for the local real estate market. The number of houses sold during the first half of 2012 has increased 5 percent over the same six-month period in 2011. This may not seem significant on the surface, but when put in the context of recent history – where the number of houses sold has declined almost 15 percent every year since 2005 – a 5 percent increase is really a 20 percent turnaround. This is a much welcomed trend for an economy where the number of houses sold during a single calendar year is down a whopping 53 percent since 2005 (the life span of the current recession).
Slow sales, rather than declining values, have been the most significant symptom of the weakened economy for the local housing market. Lexington has not seen the declines in property values reported by the national media as experienced in Florida, Nevada, California and other areas that benefited from the enormous increases in property values prior to the recession. Locally, property values have remained mostly flat – during the same six-year period where we experienced steady declines in the volume of sales, we saw steady increases in median sale prices.
A stagnant economy and too few comparable sales have meant that very few neighborhoods in Fayette County have experienced wholesale, upward reassessments by the PVA since 2008. Only one neighborhood, Harrods Hill, was reassessed for 2012. Early indications are that less than a half dozen residential neighborhoods are in need of upward reassessments for 2013, which may include Mt. Vernon, Montclair, Herr Park and Lakeview Island.
In spite of the lack of reassessments over the past several years, the annual property tax roll in Fayette County has never declined. In fact, it has grown – at a very modest rate of less than 2 percent per year. This growth is attributable to sales, property improvements and the use of technologies implemented in the PVA office that have aided in the discovery of improvements not previously listed on the tax rolls.
The accompanying chart is a snapshot that compares home sales in individual neighborhoods from 2009 through 2011. 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 at best.