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For the second straight year, the Fayette County real estate market has seen significant growth in terms of the number of homes sold. Median sale prices continue to be strong, and the overall property tax roll in Fayette County has surpassed $23 billion for the first time.
During the recession, the number of homes sold declined significantly each year. This began in 2006 and continued until 2012, when total sales exceeded 2011 volumes by nearly 20 percent –– bringing a much welcomed trend reversal. A nearly identical increase was realized for 2013, with approximately 4,200 single-family home sales. Although this represents a promising 40 percent increase over the low water mark of 2011, it’s still a long way from the record high of nearly 7,000 similar transactions in 2005.
Although strong January sales suggested that 2014 could be another year of significant growth, sales dipped during the remaining winter months, only to bounce back in June. Given these ebbs and flows, we will have to wait and see if 2014 will be a year of growth, decline or plateau.
In spite of the slower sales during the long and arduous winter of 2014, we have reason to be cautiously optimistic. In addition to recent increases in home sales, we have also seen a 20 percent increase in residential building permits over the past two years. Although the volume of permits flattened during the beginning of the year, they have been strong throughout the most recent quarter.
Prior to 2012, the local housing market responded to the recession with relatively few home sales, rather than across-the-board declines in property values, such as those that were reported in places like Florida, Nevada and California. Because of this lack of sales data upon which to base accurate reassessments, neighborhood reassessments due to property value increases have been reduced to as few as a dozen neighborhoods over the past five years.
Even though we were not doing a lot of reassessing, the annual property tax roll in Fayette County never decreased. In fact, it has grown at a very modest rate of about 1.5 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 2010 through 2013. 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.