Since I get all kinds of newsletters and magazines about real estate, I’ve read a lot of predictions about buyers leaving the burbs and buying downtown. Sorry, not in Lexington. I guess the people that build the condos in downtown Lex a few years ago must have been reading the same articles. I predicted in 2006 that there wasn’t enough of a market to support all the new condos. Back then, everybody was buying them to flip. That wasn’t a real market. Just goes to show that what may be happening in many other places doesn’t mean it applies here.
Why? For starters, Lexington just isn’t big enough. The people that are returning to downtown are in big cities and want to escape a long commute. When you spend 3 hours a day just getting to and from work, it becomes a quality of life issue. You can get from one end of Lex to the other in 35-40 minutes even in bad traffic. A lot of Lexingtonians have moved here from rural areas in Kentucky or transferred here from a larger area. They always tell me they are used to driving much more than we do here, so it is a non-issue to them.
The next reason is Lexington doesn’t even have suburbs for people to leave! We have suburban type neighborhoods, but it is all still Lexington. The furthest developed point in Fayette County is still only 20-25 minutes from the core of downtown. We just don’t have the sprawling suburbs that are miiiiiiles away from anything like a true city does.
The last reason is a pretty big one too. There isn’t enough area downtown for all those people even if they did want to move there. There just isn’t enough good existing housing downtown. You pretty much have very small houses in areas people don’t want or very nice houses that are out of reach for the average buyer. We do have some nice areas just outside downtown, but in reality, they were just as much a suburban type neighborhood when new as what we have on the edge of town. Plus, they aren’t the kind of areas that the articles are about. Places like Gardenside, Southland and Meadowthorpe are close to downtown and still affordable. Spending more gets you into Ashland Park, Chevy Chase, Fairway and Kenwick.
I also don’t see the condo market getting off the ground anytime soon, even if we returned to a good economy and real estate market. The thought is that the retiring baby boomers will want to be there and walk to everything and enjoy the low maintenance lifestyle. My parents are boomers. They and all their friends like the idea of it all. Why just the idea? Like other articles we have all read, this is the most active and affluent group of senior citizens ever? Where do you keep your canoe, boat, bikes, motorcycles, extra cars when you have one parking space and 800 square feet? At best, I can see really wealthy boomers having a downtown condo as a second home.
So, in a nutshell, this trend will only apply to cities with a big enough downtown and sprawling suburbs. That just isn’t Lexington…..right now. What do I predict? For the short-term, more of the same. Lexington has 3 types of buyers: Those who want something closer in town and an older house, those who go for something further out to get a newer house with the features they want, and those that look at everything in their price range. In the long-range, Lexington will eventually use all of its available land. When that happens I think we’ll start to see a huge price difference between Lexington and the surrounding towns. When the land becomes that valuable, we’ll see a lot of what are now cheap areas redeveloped.