Lexington home sales rise dramatically in July, August compared with 2011

A sold sign in front of a house in the Masterson Station Subdivision off Leestown Rd. in Lexington, Ky., Wednesday, September 19, 2012. Photo by Charles Bertram | Staff
A sold sign in front of a house in the Masterson Station Subdivision off Leestown Rd. in Lexington, Ky., Wednesday, September 19, 2012. Photo by Charles Bertram | Staff Herald-Leader

Lexington home sales rebounded strongly in the last two months compared to a year ago, according to data released this week by Property Valuation Administrator David O'Neill.

Sales of homes, townhomes, condos and duplexes rose 37 percent in July compared to July 2011, and sales were up 20 percent in August.

That builds on momentum that began in the first half of 2012 when home sales in Lexington showed modest increases compared to the same months in 2011. The upward trend appears to be evidence the housing market is stabilizing and beginning to recover from its long doldrums.

Home building, though, remains a tough area, leaders say.

"I'm very excited about the numbers we're seeing across the board," O'Neill said. "Our local economy is fairly solid. All of the numbers we're seeing right now are very promising."

Lexington-Bluegrass Association of Realtors President Mary Anne Simmons said that while August is typically a slower month in a Realtor's peak season, it wasn't the case this year.

"It's really a positive indicator that the market is picking up," she said. "And everybody's business has picked up because of the transactions including contractors, roofers ..."

"Nobody can get to you right now if it has to do with a home, and that's exciting for us to see."

Those contractors are also busy with building permits issued for residential renovation projects. The number of residential building permits issued has been up year over year all but two months so far in 2012.

"People have been reluctant for a long time to spend money on their houses and buy new homes, and I think people are now starting to venture out and do things," O'Neill said.

Lexington's performance mirrors growth nationally. Earlier this week, the National Association of Realtors reported that sales of existing homes rose 7.8 percent in August.

Tim Haymaker, owner of Lexington's Haymaker Development Co., said he's seeing younger homebuyers taking advantage of the historically low interest rates.

"They're highly educated, they don't want basements and they're two incomes with no children, and they know that this interest deal is going to change," he said. "They're getting in while they can, and they're taking the money they would spend on basements and buying really nice stuff.

"They want really cool things like granite tops, fireplaces, jacuzzis..."

But Haymaker cautioned that the bulk of the growth is coming only in the middle market of homes.

"The top end is still gone, and the bottom end is still gone," he said.

Haymaker also cautioned that while things are improving, the housing market is still near historic lows. He cited historical data of single-family home permits issued in Lexington and noted that it remains on par with the early 1980s "when we had 20 percent interest rates" and Lexington was much smaller by comparison.

Todd Johnson, executive vice president of the Home Builders Association of Lexington, said his organization's members are still finding it tough to obtain financing to build new homes.

"The lending situation has not improved any," he said. "I don't think it's gotten any worse, but the financing side of it, bank regulations, getting loans closed and appraisals done has not really improved any yet.

"But on the positive side of things, we are up in permits ... they're not outstanding numbers, but they're trending the right way."