The Lexington real estate market continued to perform well in 2016. The first-half of the year experienced a combination of improvements, including increases in home prices and appreciation rates. Home prices for Lexington real estate continued to grow relative to last year, while appreciation remained on course for positive gains. In fact, gains in the last three years have extended the trend of positive price growth since the recession. Although lower than the national average, the Lexington real estate market continued to grow stronger in 2016.
Additional improvements during the year included home affordability, new housing construction and the local economy. Steady improvement in unemployment and job growth helped to boost the Lexington real estate market during the first six-months of the year. Home affordability and new housing construction also fared well. The Lexington housing market is now among the most affordable in the country, helping to benefits homeowners and investors alike.
Lexington, KY Real Estate Market Statistics:
The Lexington real estate market continued to experience favorable gains in the form of home appreciation in 2016. One-year and three-year appreciation rates for Lexington real estate were 7.4 percent and 8.4 during the first-half of the year. In comparison, the national average saw one-year and three-year rates of 4.9 percent and 17.8 percent. From an investment perspective, the last three years have produced positive gains in home appreciation. For those considering Lexington real estate investments, the following highlights appreciation gains from previous years:
- Homes purchased in the Lexington, KY housing market one year ago have appreciated, on average, by $13,565. The national average was $14,963 over the same period.
- Homes purchased in the Lexington, KY housing market three years ago have appreciated, on average, by $20,186. The national average was $46,878 over the same period.
- Homes purchased in the Lexington, KY housing market five years ago have appreciated, on average, by $32,439. The national average was $82,353 over the same period.
- Homes purchased in the Lexington, KY housing market seven years ago have appreciated, on average, by $33,372. The national average was $77,054 over the same period.
- Homes purchased in the Lexington, KY housing market nine years ago have appreciated, on average, by $30,561. The national average was $31,126 over the same period.
Along with positive appreciation rates, the Lexington real estate market continued to produce solid gains in home equity. Price appreciation and principle payments in the last three years have boosted total equity growth since the recession. Homes purchased in the last year alone have appreciated by $13,565, compared to the national average of $14,963. The last nine years have earned moderate equity gains, but homes purchased in year seven reached the largest margin in home equity at $33,372. That said, Lexington real estate investing is expected to begin climbing in popularity as home prices and equity gains continue to increase.
Lexington real estate investors should also consider foreclosures. According to RealtyTrac, the month of December experienced 437 properties in some stage of foreclosure, a 29 percent increase from the previous month and 26 percent higher than the same period last year. Bank owned real estate, on the other hand, recorded unusual activity in the month of December. The number of REO properties in Lexington declined 23.5 percent from the previous month. However, in comparison to the previous year, REO properties in Lexington have increased by 62.5 percent. For those considering investing in the Lexington real estate market, foreclosures could be an excellent opportunity to get started.
Lexington, KY Real Estate Market Summary:
- Current Median Home Price: $160,400
- 1-Year Appreciation Rate: 7.4%
- 3-Year Appreciation Rate: 8.4%
- Unemployment Rate: 4.1%
- 1-Year Job Growth Rate: 1.1%
- Population: 308,428
- Median Household Income: $48,667
Lexington, KY Real Estate Market (2016) — Q2 Updates:
The Lexington real estate market was off to a hot start in 2016. The median home price during the second quarter was $160,400, with one-year and three-year appreciation rates of 7.4 percent and 8.4 percent. Moreover, gains in the last three years have extended the trend of positive price growth after the recession. Home prices and appreciation rates for Lexington real estate, although lower than the national average, continued to earn plentiful gains in the first-half of the year.
Along with improving home prices, the second quarter also experienced enhancements in the local economy. Unemployment in Lexington is better than the national average and improving, while job-growth continues to gain steam. Unemployment was 4.1 percent in the second quarter, compared to 4.9 percent by the national average. One-year job growth in Lexington reached 1.1 percent, whereas growth in the rest of the country increased by 1.8 percent. Nevertheless, the improvements in the local economy help to benefit the Lexington real estate market in 2016.
One factor influencing the Lexington housing market in a positive manner was home affordability. Homeowners paid 7.7 percent of their income to mortgage payments during the second quarter, compared to the national average that paid 15.8 percent. As a result, the Lexington real estate market is among the most affordable housing community in the country. One factor helping to lower home affordability in the area is new housing construction. The second quarter saw new housing construction reach 17.4 percent above the long-term average, with single-family housing permits increasing 5.5 percent from the previous year. That said, construction is on the rise relative to last year which suggests the local inventory has stabilized.
Moving forward, the Lexington real estate market is forecasted to see higher price growth in the next 12 months than the rest of the U.S. According to the National Association of Realtors (NAR), home prices for Lexington real estate is predicted to grow by 4.4 percent, compared to the national average of 3.6 percent. With that said, the Lexington real estate market is shaping into one of the hotter real estate markets in the country, and the positive projections are expected to entice investors and homeowners alike.
