real-estate

What happens when Lexington runs out of space?

by John Rice

Want to know what I am thinking about?  Land.  That’s right, how much of it we have left in Fayette County and what it means when we run out.

Lexington has an Urban Service area, which is the land available for development…..it’s like our version of what other towns call their “City Limits.”

Short of expanding it, we will run out soon.  Now, I am sure the city will reluctantly expand it a little, but we don’t really have much space left.  Period.  We are already to Jessamine County on the south.  We have giant horse farms to the east and west.  These are farms owned by people who don’t need money.  Even if they decided to sell, it just would not be profitable to develop.  Plus, many farms sold off their property development rights, aka PDR, to the city.  That means they will always be farms.  Anything outside the urban service area cannot be subdivided into anything less than 40 acres.

About all we have left is out towards Georgetown and Winchester Road.  After that it is infill.  After than we will probably see more construction in adjoining towns, giving Lexington “Real” suburbs.

So what will happen at that point?  Prices in Lexington will go up.  Neighborhoods/locations that have been less than desirable will become more desirable.  We’ll see many older neighborhoods renewed since people will be happy to live somewhere in Fayette County.  We’ll see more additions and remodeling too.

Lexington will continue to grow, like it or not.  It is just too pretty of a town to not.  It has enough large employers that it will always be the commercial center of this half of the state.  Many people go to college here and never leave.  Truth.

Think of it in these terms…..the 40502 zip code has always been the most desirable part of Lexington.  There really are no bad areas of 40502.  Kenwick was the armpit of 40502 until about the mid 90’s.  That neighborhood still has a long way to go in the very back, but it is getting there quickly.   People want to live there for its location.  Same thing will happen all over Lexington eventually.  Many neighborhoods that people are not interested in today will go up a notch or two in desirability as living anywhere in Lexington becomes more desirable than commuting from a surrounding town.  As prices in 1st choice neighborhoods go up due to demand, that will push buyers to their 2nd choice neighborhoods.  Rinse.  Wash.  Repeat.  The values of the 2nd choice neighborhoods will go up, pushing buyers down another ring.  At that point many will have to pick between living in Lexington or being in Nicholasville, Winchester or Georgetown.  Those are the surrounding towns that I think will grow the most as we run out of space.

NOW is the time to get into Lansdowne Merrick

by John Rice

Pepperhill

Lansdowne-Merrick.  Kind of reminds me of Kenwick in a way.  I mean, here are two neighborhoods that have an awesome location and have been the bargain of the 40502 zip code.  Kenwick was underpriced all the way up until the late 90’s.  It has arrived.  Lansdowne-Merrick on the other hand, is about to arrive.

What makes this neighborhood so right?  The location.  Just like Kenwick, it is surrounded by super desirable neighborhoods costing much more.  Check out a map and you’ll see what I am talking about.  You’ve got Lansdowne Estates and the Glendover area just across Tates Creek Road.  Across Alumni Drive is Turkey Foot and Lakewood.  Warrenton Woods is right beside you.  Castlegate is across Chinoe Road.  Oh, and you have a large park and elementary school in the neighborhood too.  Throw in being 5 minutes to The Lansdowne Shoppes, Chinoe Shopping Center and the Romany Road area, and you can see how you are getting the 40502 lifestyle everybody wants for half price.  I’ve always considered this neighborhood to be the “Lite” version of Turkey Foot.

This is a 70’s neighborhood.  You get some ranches, 2 story houses, a few split foyers.  You will see some wood sided contemporary homes too.  Most range from 1800 square feet to 2500 square feet.  Some have basements.  Some have finished basements that would add to that square footage.

The value range is mostly $200-300k.  Towards the lower end, you’ll get a solid house that may need some updating.  On the higher end, you should expect either a nicely updated house or a larger one with a basement.

I have been saying for a long time that this place will pop like Kenwick did.  I’ve noticed a few super updated houses on the market lately.  Today, I saw this house that is undergoing an extensive renovation.  They are blowing out the back of the roof to add more space.  When you start seeing this, you know it is a good time to get in the neighborhood.  You just cannot beat this location.  As prices in surrounding neighborhoods have gone up, this is the last undervalued spot to be in 40502.

Other neighborhoods on my watch list:  Meadowthorpe, Idle Hour and the front part of Gaineway.

Chinoe Road-Most Beautiful Street in Town

by John Rice

Chinoe

Having done most of my growing up in Ashland and Frankfort, I always thought of Lexington as “The Big City.”

We would come to Lexington to visit my aunt and uncle in the 70’s.  Then in the early 80’s we would come here to see movies at the Kentucky Theatre, eat at Alfalfa’s or Max & Erma’s, shop at Dawahare’s or J&H Army Navy Store.  Lexington has just always felt like a special place to me.  I always had my eyes wide open checking out the sites, planning on where I would want to live if I ever had a chance to move here.

That happened in 1985.  My dad was out of law school and got a job here.  We ended up in Kenwick LONG before Kenwick was a cool place to be.  I was a sophomore at Henry Clay.  I only had one friend here, a kid named Daniel whose parents were friends with my parents.  I was 15.  Too young to drive but eager to explore Lexington.  I decided to ride my bike over to Daniel’s apartment on Lakeshore Drive.  We rode all over the Ashland Park and Chevy Chase area.

I remember being totally in awe of how pretty Chinoe Road was.  I don’t think I had ever been on it before.  It was a warm and sunny September day.  Late afternoon.  It didn’t feel hot since we were under the  cover of all the big trees.

To this day, nearly 30 years later, I still think that first section of Chinoe Road between Richmond Road and Fontaine is one of the prettiest streets in all of Lexington.   All of the houses look as good as the one in the picture above.  If I were a artist, I would paint a picture of that street with all the big beautiful houses, big trees and lush landscaping…..but as I discovered in a water coloring class I had my senior year, I am not.

Sometimes, if I am not too busy trying to get where I am going, I’ll drive down that road and I feel like I am 15 years old again and seeing it for the very first time.

Now really is the best time to buy (and why it won’t last long)

by John Rice

Yeah, it sure is.  I remember throughout my career seeing other Realtors try to create urgency by saying “Now is the time to buy!”  It was usually tied to a drop in the interest rates.  I always thought my clients were smart enough to realize the interest rates dropping by an eighth of a point wasn’t that big of a deal, so I never jumped on that wagon.

Today is different though.  I am saying now is a great time to buy.  Probably the best time in the past 15 years based on all that has happened.  I’m not going to quote a lot of statistics here since they don’t always tell the whole story.  Like sure, having 1126 sales year to date verses 1000 sales for the same period in 2011 feels good, but 2011 was a bust after the tax credit expired in 2010.  Somebody could point out that 1126 sales YTD this year is nothing compared to the 1722 we had in 2005, but we don’t know how many of those sales were houses that were flipped, meaning one house can count for two sales.  Another could point out that we have had a milder winter that has brought buyers out early………and we all could debate on why the glove didn’t fit O.J. Simpson too.

I’m mainly looking at stability.  As somebody who owns a few houses, I’m concerned most about value.  It’s only the realtor in me that cares about the number of sales.  If supply and demand are pretty in balance, I don’t care.  If my house were the only one for sale and there was only one buyer out there, I’d be fine with it.

This is the first year in a long time where prices aren’t dropping around here and the market is standing on its own two feet.  The tax credits tried hard to stabilize the market, but that turned out to be just a shot in the arm.  Today, we don’t have any crutches for our market.  It’s just about good prices, really low interest rates, and the appearance (whether real or perceived) of an improving national economy.  I’m not seeing the fear of the future like we did as recently as last year, and I sure am not sensing the hesitation from buyers to pull the trigger on a house.

How long will this last?  Who knows?  While we aren’t going to wake up later this year to find an early 2000’s frenzy, I think we’ll see seller’s gaining confidence again.  Right now, they still feel pretty lucky to sell their house.   I think they’ll become less willing to bend over backwards for buyers, which means a higher sales price and/or less negotiation over inspection repairs.  Also, rates will eventually go up.  While rates dropping don’t motivate buyers as much as you might think, rising rates do.  That’s always been funny to me how people seem to care more about a payment going up by $35 a month than they do about a payment dropping by $35 a month.   Let me ask you this, do you see rates going much lower?  If your answer was no, that means the only thing rates can do is stay the same or go up.

So, now really is a great time to buy.  It’s also a great time to sell.

Reading the tea leaves when your house isn’t selling

by John Rice

House not selling? Wondering how to interpret what is going on? Here are a few of my thoughts on some common situations. The following assumes your house is being presented well online with plenty of good pictures and marketing remarks that describe it with more than trendy generic AI generated verbiage.

The house that gets lots of showings but no offers

Assuming that you don’t have some negative that wasn’t obvious like backing to a highway, apartments, or having an Eiffel Tower looking electrical thing in your yard, this situation simply means that the house doesn’t live up to what buyers expected. The good news with this one is that buyers think the price for what they thought the house would be is okay or else they wouldn’t come at all. The solution here is to either lower the price or improve the house so that it meets the expectations buyers have. Whichever is easiest.

I once had a condo that got tons of showings. I kept encouraging the seller to paint. Once we did, it sold. I recently had another listing that was getting tons of showings. It was a nice place, but just felt like a 15 year old house that needed a fresh vibe. The seller did some painting and replaced the flooring in all the bathrooms. As soon as it was done, it sold. Both of these places looked great online, and just needed to match what buyers thought they were getting. Both were improved for far less than the price reduction we would have needed, so both sellers actually came out better by going that route.

The house that gets no showings

This one is easy, but hard for sellers to accept. The price is too high. If a house is presented well on the MLS, and still nobody comes to see it, all you can do is lower the price. Real estate is all about price, location, and condition. You can’t change the location, but the other two you have some control over.

Also something to think about is this: If you have a $400k house and you’re asking $475k for it, buyers are comparing it to other houses that are really worth the asking price. The buyers who are going to spend what your house is really worth aren’t even going to see it since the list price is over their budget.

The house that gets the same bad feedback over and over

This is the least fun thing that can happen to a seller. I mean, they get kicked out of their house for showing after showing with no offers AND get to hear what people hate about their house.

Several years ago I had this really cool older house that had been mostly remodeled. It had the smallest living room I have ever seen……must have been the smallest anybody had ever seen since that is all I kept hearing after the showings. I’d ask for feedback and the buyer’s realtor would go on and on about how beautiful the place was, how unexpected it was to have walk-in closets in such an old house….then they would say their client wasn’t going to buy it since the living room was so small.

We tried putting in smaller scale furniture, but that didn’t help. After that, all we could do was drop the price. A price reduction opens the house up to a larger pool of buyers as well as enticing them to overlook a shortcoming if they are getting a better deal. We got that one sold too.

If you have a situation that doesn’t fit into these scenarios, give me a shout and I’ll let you know what to do.