When you think of resale value/potential, you are probably thinking about things like a preferred school district, the most desirable part of town, etc. All of those are good things, but what if you don’t have any of that? You know…..there is a lot of Lexington that doesn’t have a desirable school district, and heck, most people strongly favor the south end of town. What about those houses on the north end of town? What is their resale value like?
Well, it is as good as it is on the south end of Lex. Yep. Sure is. The difference is that the prices have always been lower for that part of town, but hey, they seem to be holding their value as well as any other place in town. In fact, since our market has been hit the hardest over $500k, you could argue that the buyer who spent $100k on a house in 2005 on the north end of town with a less desirable school district has actually come out better than the guy that dropped $1,000,000 on an awesome house in the most expensive zip code, 40502!
Just for fun, I ran some numbers for Area 1 and Area 4 in Lexington. Area 1 is the NW part of town between Leestown Road and North Broadway. Area 4 is SW Lexington from Nicholasville Road to Leestown Road. Area 1’s hook is value. Area 4 is probably the most desirable part of town for all the things most buyers want. To be fair, I only looked at houses from $100k-$250k. Area 4 has a lot of expensive neighborhoods, and I wanted to make the figures apples to apples. I picked that price range because it represents most of the Lexington market.
So, from Thanksgiving 2008 to Thanksgiving 2009, Area 1 had 431 sales with an average price of $151,110 which got you a 1755 square foot house that took an average of 66 days to sell. Area 4 had 739 sales averaging $156,643 for a 1745 square foot house that took 62 days to sell.
Here are the numbers for Thanksgiving 2009 to today: Area 1 had 320 sales averaging $147,559…..1759 square feet….59 Dom. Area 4 had 617 sales….$159,458….1760 square feet…..57 DOM. (Okay…..sure you realized that the average price for Area 1 declined while it went up a little for Area 4. I really haven’t seen this in individual houses….I really think it is because savvy builders built more houses in the $125-140k range for first time buyers looking to take advantage of the tax credit and brought the average down. Area 4 doesn’t have much new construction….esecially in that price range.)
So….how does the north end of town stay that strong? I really think it all has to do with value. I have sold a ton of houses in and around Masterson Station. All of my buyers saw that they could get a little more house for their money. They have all been willing to drive to other parts of town for shopping/dining to get a bigger and better house. This part of town also works well for folks working in Frankfort, those needing to be close to the interstate, and those who work at places like UPS and other businesses that are close by. Because of the value hook, I think the north end will always need to stay a little less expensive than the south end of town, but there will aways be people who appreciate that value and will buy out there.