A recent report on Fayette County Housing Demand cites forecasts of household growth yield an overall demand for 22,780 new housing units by 2025.
The report, sponsored by a consortium of Lexington stakeholders and governmental officials, cited statistics from the Kentucky State Data Center that suggest Lexington will continue to grow at a rate of 1.2 percent annually thru 2025, yielding a projected Fayette County population of 354,000.
In order to meet the growing demand, the report suggests that Lexington will need approximately 15,160 new single family residential units, 6,275 units within multi-family structures, and 1,345 units classified as condominiums or “other” units by 2025.
According to Lexington Bluegrass Association of Realtors (LBAR) 2017 President Ty Brown, “The association wants to make sure citizens’ needs are met by accommodating the expected population growth of the community, and this report sets out the very real challenges in the Fayette County housing market moving forward. Fayette residential sales are strong currently, and have been so for a relatively long time. It is a very tight market locally. And the lack of inventory is increasingly concerning.”
Declining inventory, fueled by projected Fayette population growth, will lead to upward pressure on home prices, diminishing housing affordability. A by-product of this increased demand will be that market-rate housing will be less affordable to middle income earners and out of reach to lower-income earners.
Shrinking inventory is creating a market where buyers are scrambling for houses which leads to sellers who are hesitant to sell. Sellers are concerned they won’t have a place to go which feeds into the continued decline of inventory.
According to the LBAR Statistical Report, Fayette County residential sales increased nine percent from 5,056 sales reported in 2015 to 5,501 sales reported in 2016. The median sales price increased four percent from $169,000 in 2015 to $175,000 in 2016. The average days on the market decreased 34 percent from 61 days in 2015 to 40 days in 2016 as the market continued to tighten.
January 2017 residential sales are off to a great start with a 34 percent increase from same month last year at 324 units up from 241.The Fayette January 2017 months of inventory (MOI) is 2.5 months, down forty percent same month last year. Six months of inventory is generally considered by Realtors to be an average healthy market.
Further, the report identifies clearly the effects of the currently unmet housing demand within Fayette County, which is forcing people to travel farther to and from their job into adjacent communities where they reside. Fayette County was home to 164,251 jobs in 2002, and in 2014 the number of jobs swelled to 191,977, equivalent to a growth rate 16.9%.
However, Fayette County jobs are increasingly filled by commuters from outside the county. In 2014, 49.1 percent of all Fayette jobs were filled by Fayette residents, down from 61.1% in 2002. Despite the growth of 28,000 jobs, the total number of jobs filled by county residents decreased from 100,431 in 2002 to 94,338 in 2014.
Job growth and economic opportunity drives the housing industry. A home is where each job goes at night. When communities fail to meet their demand for housing, housing prices rise, people commute further, and the community’s quality of life suffers, as does its infrastructure and environment.
The report also projects that homeownership in Lexington will remain low relative to its historical average, with homeownership only expected to increase to 52.75% in 2025 from its 2015 level of 51.5%. Also, the population continues to trend older with over half of anticipated householders from 2015 to 2025 to be age 65 years or older.
“The association is committed to the progress, prosperity and economic viability of Lexington. And proper planning to meet the demands of the community to ensure an adequate housing supply is critical to the success of all communities,” said Brown. “We believe this report contains valuable insights and will inform the Urban County Government as it prepares to develop the 2018 Comprehensive Plan.”
LBAR represents more than 2,900 realtors located in Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Fayette, Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Menifee, Montgomery, Nicholas, Powell, Rowan, Scott, Whitley, and Woodford Counties. Visit www.lbar.com or call 859-276-3503 for buying and selling resources and real estate listings.
For additional information please contact Elaine Hangis, LBAR Chief Executive Officer (859-276-3503 or via e-mail, firstname.lastname@example.org).
From LBAR Communications