Bloomberg article highlights Lexington real estate market affordability
June 10th, 2008
Yesterday’s article by John F.
Wasik titled Housing Bubble Didn’t Burst
Everywhere in U.S. posted on Bloomberg.com specifically mentioned Lexington as offering a
“true housing bargain” and a “top market with low risk.” LBAR President Judy
Craft comments that “this article is not pointing out new information, as our
statistics continue to show that there is no housing bubble in the Bluegrass. However, Wasik’s observations are very
important for the local consumer to understand as they are constantly bombarded
by national news of a housing crisis.” Todd Johnson, executive vice president
of the Homebuilders Association of Lexington, says, “the report was a
confirmation of what those of us in the local housing industry have been saying
for the past several months. It is a great time to buy a home in Central Kentucky.”
Wasik
points out that many economists and national media outlets are overlooking the
fact that many real estate markets across the country are stable and affordable
unlike the heavily fluctuating markets in Arizona,
Southern California, Florida and Nevada. The article’s
focus on “bubble-averse locales” is heavily indicative of the Central
Kentucky real estate market.
Locally, home prices did
not experience dramatic and unsustainable growth over the past six years and
therefore home prices are not falling at alarming rates like those markets
which experienced the extraordinary run-ups in prices. For example, the
National Association of REALTORS® (NAR) released data showing that on average
the existing home sale median sale price dropped a whopping 8% for April 2008
compared to April 2007. Locally, the existing home sale median sale price
dropped only 0.67% for the same time period.
In addition, the area’s
Housing Affordability Index (HAI) for April was 165 while the nation’s was only
129 according to NAR. An HAI of 165 means that the median family income is 165%
of the necessary income to qualify for a median priced home with a 20% down
payment on a 30-year fixed rate mortgage.
As the region’s leading advocate
for homeownership, Lexington-Bluegrass Association of REALTORS® (LBAR)
understands the value and joy of owning a home. LBAR represents more than 2,400
REALTORS® located in Anderson, Bourbon, Boyle,
Clark, Fayette, Franklin, Garrard, Harrison,
Jessamine, Madison, Mercer, Montgomery,
Scott and Woodford
Counties. Visit www.lbar.com or call 859-276-3503 for buying
and selling resources and real estate listings.
