neighbohoods

Last nail in the coffin for the Pandemic era market

by John Rice

All throughout real estate history, we have had value differences due to location. Similar houses in the best locations got top dollar and the less desirable locations were worth less.

Except for the COVID era market.

During the pandemic, supply was so short and demand was so strong that pretty much the same house would sell for the same price regardless of things like what part of town it was in, what school district it was in, and even what condition the house was in.

This was especially true for the more affordable houses. Back then, a small 3 bedroom, 1 bath house without a garage was going for about $200k regardless of whether it was in a Grade A, Grade B or Grade C location. That was because the market was so tight that people didn’t have a choice in location. Buyers were shopping all over town, looking at any house in their price range. There were so many buyers doing this that location didn’t seem to matter much. It was about getting a house, not getting a house where you want it to be.

We’re not wearing masks. Rates aren’t 3%. That crazy market is in the past now.

Now that we are starting to see some houses staying on the market for more than a few hours, it’s back to location being important. As this happens, I think we will see the Grade A neighborhood prices remain stable. The Grade B and Grade C locations that recently had been getting the Grade A money…..well, they aren’t any longer. That is one reason we are seeing so many price reductions now. It just shows that the market is returning to normal. It isn’t crashing.

Back during the pandemic, I would have people ask me what a house was worth. I would tell them I can easily determine what it is worth, but the value and the sale price were not related for that brief time. I would tell my Buyers to view the sale price as paying what the house was worth plus a “Convenience Fee” for winning the house in multiple offers. Now that we aren’t seeing multiple offers on every single new listing, we are back to a house’s value and its sale price being the same.

Where to buy when you can’t afford the neighborhood you really want

by John Rice

Like everybody these days, I am sure you are running the numbers to see how much house you COULD have afforded when interest rates were around 3%. Quit doing that! All you are doing is making it harder to live in today’s reality of rates over 7%.

Instead of sitting on the sidelines waiting for rates to drop so you can get that dream house in your dream neighborhood, how about still buying something that has a similar vibe but will have a cheaper mortgage payment?

If you love the Tates Creek area, and I mean the part with the 40502 zip code, and you want a house built in the middle of the last century, Lansdowne is likely your dream spot to be. And for good reason. Those giant lots and large homes have been fantastic since Day 1.

But you’re looking at financing most of the $600k to million dollar plus purchase price and your wallet says “No Bueno”. What do you do? Stay where you are and be unhappy? Keep renting and get absolutely no financial gain?

No, you look in Lans-Merik since it is right across Tates Creek Road from Lansdowne. Here you will get almost as large of a lot and the houses are mostly from the 1970s but it has a similar vibe. You will end up spending between $400k to maybe just over $600k.

$400k too much? While it is technically not in the 40502 zip code, Gainesway is literally just across New Circle Road from Lans-Merik. Here you will get a 1960s home on a larger lot in the $250-400k range.

MORE similar neighborhoods at different price points

by John Rice

Let’s say you want to be in that sweet spot of the Tates Creek area where you’re equidistant to Hamburg, Fayette Mall and downtown.  You want a traditional house.  Southern Living.  Nice yard with big trees.  I’ve got three more neighborhoods for you at three different price points…..Here we go:

Hartland

I remember when Hartland was brand new.  It was way the heck out there.  (It hasn’t moved closer-I mean that it seemed way out at the time.)  Man O War was a two lane road.  There was no Tates Creek Shopping Center.  Who knew back then that this neighborhood would age so wonderfully.  The design is like nothing Lexington has seen since Chevy Chase.  The main roads have a tree lined median.  All the cul-de-sacs have landscaped islands.  It just feels wonderful out there. The price range for Hartland and all the derivative sub-neighborhoods is about $250k through close to $2,000,000.  Most are in the $300-500k range.  For that, you get a nice big house from the time when J.R. Ewing was shot on Dallas.  Big yards are the norm.  Most I’ve seen are 1/4-1/3 acre.  There is a neighborhood pool/clubhouse.

Here is what you can expect:

 

Cumberland Hill

Built about the same time as Hartland, just on the other side of Tates Creek Road.  Cumberland has a more casual, less pretentious vibe to it than Hartland.  Its the neighborhood for somebody who can afford a Mercedes but drives a Volvo instead.  Being on the other side of Tates Creek turned out to be a good thing, because it gets the very desirable Veteran’s Park Elementary school.  Most of the houses range from the low $200s to the low $300s.  For around or just over $300k, you should expect a nice basement.  One of the coolest things about this neighborhood is that it backs up to Veteran’s Park (The park-not the school.)  At the end of Rockbridge, there is a small parking lot with an entrance to the park.  There is a walking trail and a creek through the wooded areas.  There are a couple of bridges across the creek.  It is very cool.  A pool/clubhouse are at the corner of Tates Creek and Rockbridge.

Here is what to expect:

Contemporary homes were still a little popular in the 80s, so you see a few like this.

 

Ashmoor

This neighborhood is just south of Cumberland and is also across Tates Creek Road from Hartland.  You get the same close proximity to Veteran’s Park and it is in Veteran’s Park Elementary district.  Ashmoor has always seemed like a lite version of Hartland to me.  The houses are similar, just smaller.  My favorite thing about this neighborhood are the huge Pin Oak trees than line most of the streets.   You’ll be around $200k to maybe $250k out here.

Here is what you will see:

It was the late 80s and early 90s, so you do get some houses that are like a mash up of Traditional and Contemporary.

 

There you have it.  From $200k to $2,000,000, there is a house for you in this area!

 

 

3 similar neighborhoods for any budget

by John Rice

What if you want a big lot, close in, something older, maybe Tates Creek Road area.  Well, you have three good options at 3 different price points.

All these neighborhoods are either just inside or just outside New Circle Road by Tates Creek Road.  All are close to things like The Lansdowne Shoppes, Malones, Fresh Market and The Signature Club.  One of the best things about this area is that you can get about anywhere in town easily.  UK/Downtown/Chevy Chase are close.  You are between Hamburg and all that the Fayette Mall/Nicholasville Road corridor offers…..plus, this is arguably the prettiest part of Lexington.

1.  Lansdowne

This is where you go if you have $300-700k to spend.  You’ll get one of the swankiest locations from the 1960s that use to be on the on the edge of town.  I’m taking about roads like Cahaba, Kirkland, Overbrook, etc.  Getting a half acre lot is no sweat here, some are even larger.  Overbrook Circle and Brookhill Circle are my two favorite streets since some of the houses have a view over The Lansdowne Shoppes.

Most of the houses are ranches, but there are 2 story and split foyer/split levels too.  Here is what is typical:

But sometimes you get lucky and find some real architectural gems like:

2.  Lans-Merrick

This is where you land if you want to stay in the $200s-$300s, although there are a few super nice ones that have gone for over $400k.  This neighborhood is right across Tates Creek Road from Lansdowne.   You get a great city park in the middle of the neighborhood which is right beside Julius Marks Elementary school.  Lots out here are usually in the 1/4-1/3 acre range.  Still big by Lexington standards.  Most of the houses were built in the 70s.  Lots of ranches, splits and traditional two stories.  The main roads are Pepperhill and Montavesta.  Fleetwood and Heritage are my favorite streets.

 

Here is what to expect:

But there are some that are like:

 

3.  Gainesway

This neighborhood is beside Lans-Merrick, but is just across New Circle.  It seems just as close in though, so don’t let being outside the circle mess with you.  The oldest part of Gainesway harks back to the 50s.  All the streets were named after local horse farms.  Getting a 1/4-1/2 acre lot is easy here.  Most are ranches.  The beauty of this neighborhood is that you get a similar location and lot size as the other two, but you’ll only drop $150-250k for a house.  Castleton Hill and Castleton Way are my favorite streets here.

This is what to expect:

And you might get lucky and find one like these:

 

So there you have it.  Whether you have $150k or well over $500k, you can enjoy an older home on a large lot in Lexington.

What makes a good location?

by John Rice

This week, I’ve been listening to several different buyers tell me what part of town they want to be in.  It has had me thinking about the whole “Location Location Location” thing.  I think most of the time, we as people like to reduce things down to a yes/no, for/against, good/bad scenario……Like this is a good location and this is a bad one.  I just don’t think it is that simple and here is why.

Just this week I’ve had two people tell me they really want to be in a location that many people avoid.  This is a high density area, so the buyers are looking for townhouses and condos.  See, the people that think this is an area to be avoided don’t want to be in that kind of density and are single family home types.  Both buyers mentioned that they had lived in that area before and liked how easy it was to get any where in town and that they enjoyed the 30+ acre park in the middle of the area.  When my wife and I were newlyweds, we lived in this area too…..we thought the same thing back then.

I guess my point in all this is that what makes a good location is really a subjective thing that varies greatly.  Age, income, property type, etc, all greatly have an impact on what makes a location appealing.  There is one common thing that all people tell me they want in a location:  Proximity to work, businesses they shop at, restaurants they eat at, and things like parks/sports/ or places they frequently go.  People with kids like to be in a good performing school district too.

Lexington is big enough to support all these different opinions about what makes a location good.  It is all in the eye of the buyer, and if enough of them think it is a good location, then it must be.