Suggesting recovery, Lexington home sales up 17 percent in 2012

ssloan@herald-leader.comFebruary 13, 2013 

Since the recession that began in 2007, Lexington's housing market has been seeking a bottom from which to build. The market found it in 2012.

Last year marked the first time since the mid-2000s that home sales grew compared to the year before, according to data released recently by the Fayette County Property Valuation Administrator's office.

"That should be considered very encouraging," PVA David O'Neill said.

That growth combined with similar results for other economic indicators, including building permits, suggests that Lexington is rising from the doldrums, observers say.

Home sales

Residential sales in 2012 grew 17 percent compared to 2011, according to the PVA's office, and the growth is expected to continue as interest rates remain at historic lows.

"There's just a lot of bright spots out there for the real estate industry," said Al Blevins, president of the Lexington-Bluegrass Association of Realtors.

The group has seen increased appointments and website traffic already in 2013, he said.

"We're anticipating a good year, and already a lot of agents are out spending their weekends showing homes and writing offers," Blevins said.

But Tim Haymaker, owner of Haymaker Development, urged caution.

"I hate to be a naysayer, but you have to be clearly honest with all of these numbers," he said. "They're down so low now that this percentage growth seems greater."

Haymaker said he's concerned that potential homeowners continue to have trouble coming up with down payments.

"The number of quality jobs are still weak," he said.

Home building

The number of permits issued in 2012 to build new single-family homes, townhomes and condos saw large increases compared to 2011.

"We were glad to see it come back," said Todd Johnson, executive vice president of the Home Builders Association of Lexington. "Of course, it's nowhere near our 10-year average, but it's certainly going in the right direction."

Johnson said it remains tough for builders to obtain financing for projects.

"I won't blame it on the banks as much as the regulations that make it a little more difficult not only for the builder but also the buyer to get through the loan process and approval," he said. "It still seems to be a challenge."

So far in 2013, January appeared to be a "pretty good month," Johnson said.

Dewey Crowe, director of Lexington's Division of Building Inspection, said he predicts slow and steady growth for the year, "which is probably a good way to be."

But Haymaker said his experience suggests that the growth in home building is coming only in certain segments of the market.

"My affordable-end housing starts are nothing," he said. "The middle piece is going gangbusters, but the low end and high end are still way behind."

Evidence of that, he said, is the interest in his Summerfield subdivision on Winchester Road between New Circle Road and Hamburg, where homes are priced from $200,000 to $325,000.

"We're starting 44 lots in the next few weeks, and it appears they will all be sold immediately," Haymaker said. "If they are, I'm going to quickly start another section of 60."

Commercial buildings

The PVA's data shows that commercial building permits were down slightly in 2012 compared to 2011, but anecdotal evidence suggests that activity is on the rise for 2013.

Haymaker said his residential business is mixed, but "we've never had this much business in commercial."

Multiple companies are close to moving into his Beaumont development, so "I'm pretty optimistic about what's going on."

"It's been a long time since we've had any significant opportunities, and now they seem to be proving that the pent-up demand over the last few years really was there," he said. "The economy in Fayette County seems to be moving on the upside."

Commercial properties could see some weakness this year, said Master Commissioner James Frazier III.

Frazier, who handles foreclosures, said he expects to see more of those properties foreclosed on in 2013, based on indications he has received so far.

Foreclosures

Frazier's work on foreclosures was one blemish in a year that otherwise saw growth. The number of foreclosures in Lexington in 2012 jumped 74 percent, according to the PVA's data.

Frazier was even busier than that suggests, too, because the PVA's figures do not include sales that were eventually canceled.

The growth in foreclosures, though, was partially attributable to bank-imposed moratoriums on them in late 2011 that pushed more into 2012.

"Last year was the biggest year the master commissioner's office ever had since we began keeping records," Frazier said. "The moratoriums unleashed a flood of stuff that was old."

But it appears it will be old news, he said. His calendar is looking less busy so far in 2013.

"I think we've turned through most of it," Frazier said. "I'm feeling much better about it."

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz.

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