If you have been paying the slightest big of attention to the Lexington housing market, you know we are in a steep Sellers’ Market. Great homes are selling within hours of hitting the internet, if not before. Mediocre homes, ones with small yards, basic flooring, minor flaws, are selling within 1-3 days. And on top of the quick timeline, often they are going at full or over asking price. What is causing this?
The nation as a whole is seeing a rise in home sales due mostly to the low interest rates that Buyers can take advantage of. Yesterday’s rates were at the lowest they have been since November, even with the Federal Reserve’s threat to raise them looming over our heads, it makes Buyers very confident. In Kentucky, there are several programs that, when paired with these great rates, are almost unbeatable for families in rural areas or with limited incomes. We are reaching the point now almost 10 years after the Great Recession, when we saw so many loose their homes to foreclosure, short sale, or bankruptcy, that folks are bouncing back. The prior issues have expired and they are now eligible to buy. Our baby boomers are downsizing, Gen-Xers are buying homes homes for growing families, and the Millennials are the largest group of home buyers out shopping today.
But the biggest reason Lexington is such a fast paced market is that we are feeling a huge population boom that we do not have housing for. In a recent study released by the Lexington-Layette County Urban Government it was found that over the next 10 years we need almost 22,000 more residences to house the expected population growth. (View the first draft here.) We have limited our city’s expansion with several programs such as the PDR Farms that are paid to protect the green space that makes our city so special. We have zoning rules that require any undeveloped or platted land must have 10 acres to build a home and in some places 40 acres. And ultimately we as Lexingtonians have almost a gag reflex when asked to consider living out-side our county, even just across the county line in the neighboring more rural communities. The city planners and powers that be are beginning to create a comprehensive plan for our city that will help to solve this housing crunch and release some of the boiling point pressure in our market. Until then if you are planning to buy a home in Lexington you better be prepared to offer high and fast to get most homes.