Central Kentucky residential real estate sizzles, commerce is hot
(KY. CENTRAL MARKET REVIEW) – Real estate prices continue to climb in central Kentucky, as monthly residential property sales totals consistently hit record highs. Demand for real estate remains high as the region struggles with low inventory.
On the trade side, the market has remained fairly strong over the past 12 months with a return to solid levels in 2019. Historically low interest rates are boosting the wave of growth in the residential and commercial sectors.
âAs the colder months approach, there are many signs of a strong real estate market,â said Kristy Gooch, president of the Lexington-Bluegrass Association of Realtors. âHouses always sell extremely quickly. However, the wave of multiple (simultaneous) offers has stabilized as inventories increase. “
The time it took to sell homes in central Kentucky in August was an all-time low, averaging 17 days, 55% less than the 38 days it took in 2020. Homes stayed on the market on average 42 days in 2019.
The housing stock has been growing slowly since the start of the summer and has exceeded the 2,000 unit mark for the first time since January. The number of residential properties jumped 16% from the previous month, but remains 20% lower than a year earlier.
Year-to-date, median prices for all residential sales were $ 221,000 compared to $ 194,500 in 2020, a 14% increase.
The total dollar volume of home transactions in August exceeded $ 400 million, a record high, compared to just over $ 354 million last year. For the year, total sales volume exceeded $ 2.6 billion, an increase of 20% from 2020, when the total was $ 2.2 billion.
Lawrence Yun, chief economist of the National Association of Realtors, said that at a general level, house prices are not likely to fall due to continued tight inventory conditions, but he expects prices to fall. (nationally) appreciate more slowly. pace by the end of the year.
âI agree with the national prediction,â Gooch said. âLocal demand is still very strong, which will keep prices high, but a double-digit (annual) appreciation should not last long. We might start to experience a plateau over the fall months as the market finally took a deep breath and started to relax. “
The commercial real estate market in central Kentucky saw a rise in 2021, supported by low interest rates and supported by population growth, particularly in Georgetown.
Looking back, there were historic levels of growth in commercial real estate nationally and regionally in 2019. The positive wave continued into January and February 2020; However, after March 13, activity was suspended for 90 to 180 days due to the impact of COVID.
In the fall of 2020, investors, developers and lenders were once again confident and comfortable with the idea of ââbuying, selling and building. And in the last 12 months or more, the speed has picked up.
âOur office has done a lot this year in Georgetown,â said Matt Stone, Managing Director of SVN Stone Commercial Real Estate. “Not just for us, but for everyone in the industry, there has been incredible growth in Georgetown.”
According to recently released census figures, three counties in central Kentucky have experienced significant population gains over the past decade. Scott County, just north of Lexington, home to Georgetown, grew 21.2%, up to 57,155 people, making it the fastest growing in the state. Madison County, the southeastern county of Lexington, home to Richmond, also increased 11.8% to 92,701 residents. And Anderson County, home to Lawrenceburg, which grew 11.3% to 22,852 people.
Examples of projects in Georgetown include the former Golden Corral site replaced by a 17,000 square foot shopping center, continued construction around the Kroger Marketplace and Landmark stores, and activities around the Georgetown Community Hospital, including work on the hospital itself.
The service sector continues to grow
âWe continued to see the trend in retailing towards the service side rather than durable goods in these new stores around Georgetown,â Stone said. âIt’s physical therapy, nail salons, cell phone stores, restaurants, insurance companies, and auto repair. Companies like Rector Hayden Real Estate have opened a new office in the development of Kroger Marketplace. But you’re not going to see things like women’s clothes and shoes. This trend has been going on for 10 years, but it has really been trampled on during COVID, as service-oriented industries continue to grow. “
Growth in Scott County has been accompanied by increasing challenges for their wastewater treatment facilities, resulting in a waiting list for new residential construction this year. Georgetown hopes a $ 50 million wastewater treatment plant expansion project, slated for completion in 2023, will make it easier to get building permits.
Brannon Crossing in Jessamine County has seen new construction and continues to be built, and Woodford County is also experiencing growth.
âWe have seen decent growth in Woodford County which is rare,â Stone said. âThis ties into the Midway station, which is on Interstate 64 (at number US 62/421), where we have sold almost 15 acres of industrial land. “
The Lakeshore Learning expansion, the new Thoroughbred Landscaping facility and the James E. Pepper Distillery warehouse are notable projects at Midway Station.
So why all the construction activity all around Fayette County and Lexington, but not so much inland?
âAnything over an acre in Fayette County is almost impossible to find on the industrial side,â Stone said. âRecently an acre in Fayette County cost almost $ 250,000, while ownership of a project we just completed in Midway cost $ 65,000 an acre, and that had the added value of be on the highway. “
Stone Commercial Real Estate has negotiated the $ 17.4 million sale of the vacant Richmond Road Walmart in Mist Lake Plaza. Stone sees the sale of the property to Lexington Motorsports as a real benefit to Lexington, fitting in perfectly with the city’s redevelopment mindset.
The spur of rising costs
High lumber costs have plummeted, but supply chain issues have impacted residential and commercial projects. However, most of the projects continue to move towards completion. With historically low interest rates and high borrowing power, the spur of additional costs is mitigated as mortgage payments will be lower than they might have been.
Other major construction projects in Lexington include the second Amazon facility on Newtown Pike, a 143,000 square foot delivery station, and a major overhaul of the Central Bank Center, a $ 300 million expansion by Messer Construction that will double l space in the convention center formerly known as Lexington Center. next to Rupp Arena. In the Hamburg area, a $ 47.2 million college on the active Boulevard of the Polo Club is in the design development phase and a new hospital campus, Baptist Health Hamburg, is under construction.
Messer Construction is also working on a new project for Ephraim McDowell Health in Danville and has completed work on the Turfland Clinic for UK HealthCare. Messer’s markets include aviation and transportation, federal / military and government, healthcare, higher education, industry, science and technology.
Design / build projects for hotels, office buildings and education have dominated recent projects by DW Wilburn Construction of Lexington. The company’s recent projects include the City Center in downtown Lexington, Tates Creek High School and a science building at Asbury University.
Gray Construction, a Lexington-based international company that provides engineering, design, construction and smart manufacturing services, works on projects throughout Kentucky and beyond.
Jeff Bischoff, executive vice president of business development for Gray Construction, said the bourbon industry “continues to deliver project after project,” including the $ 130 million opening of the Diageo Lebanon Distillery in County of Marion this year. It is the largest project ever to be carried out by Marion County.
In mid-2021, Kentucky’s new location and expansion announcements since the start of the year showed an economy resurfacing from the challenges of the past 15 months. Private sector companies announced 50 projects totaling over $ 2 billion in new investment and over 4,000 full-time jobs.
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