I’ve been saying that Lexington is in the “Post-housing slump era” for most of this year. Yeah, prices have stabilized and buyer’s don’t seem afraid to buy like they did in the past, but I do see one segment of the market that still may have a rough time. It’s the upscale neighborhoods that are more than 20 years old and aren’t in the absolute best school district in town. The decline hasn’t stopped, so it shouldn’t be news to anybody except those who currently have their houses on the market and aren’t getting any showings.
I’m thinking of one of my favorite neighborhoods in all of Lexington in particular. I’ve shown dozens of houses in this area over the past year or so priced from $325k to over $500k. Most of them are still on the market. Even after the values dropped significantly over the past few years, this area still is taking a hit. What gives?
For starters, these houses are all big and most are very outdated. When you go into a $150k house that is 20 years old, the main thing that looks terribly outdated is all the brass door knobs. In that price range, there wasn’t a big budget to pimp it out with all that 1991 offered. When the upscale house was built in that same year, the budget afforded pickled cabinets, gold faucets, and mauve toilets. The ones from the 1980’s could be the set from Knot’s Landing! Do you know what it costs to renovate 4000 square feet? On top of that, most of these lots are big. Few people these days (at least in Lexington Ky) want to mess with maintaining a big yard. Everybody I have shown houses to in this area all walk away in awe of the house and neighborhood, but I can tell they are doing math in their head trying to figure out how much they’ll have to spend for updating and upkeeping…..needless to say, all my clients have picked different neighborhood!!
About the only older upscale neighborhoods where I am not seeing this are those in the Rosa Parks Elementary district. Buyers there seem to be willing to overlook a lot just to get the schools. I’ve shown a lot of houses in this part of town too, and see a lot of outdated houses. Unless they are grossly overpriced, have a super steep driveway or are on a main road, they all sell quicker than the rest of the neighborhoods of similar age.
I’ve been watching a house in one of my favorite neighborhoods for about a year now. It is the only house I have ever been in that double wowed me. It needs everything but the kitchen updated……a new roof, all new HVAC, and windows too. I think the current price is just under $400k. I think it will have to get down to $360k before anybody is willing to take on all that work.