Kentucky Home Builders Share Positive Outlook
After a slow start, the Kentucky real estate market will “pick up steam in the spring,” the president of The Market Edge, a Knoxville housing research firm, told the Home Builders Association of Lexington on Tuesday.
Dale Akins predicted that building permits will be down by about 10 percent nationally in 2007, but only 5 percent in Lexington, Louisville and other Southeast cities where his firm collects building permit data.
The biggest threat is psychological.
The media, Akins observes, generalizes as if there is one national housing market that behaves uniformly, when in reality there is actually a diverse collection of local markets.
“I’m concerned that the media will get it wrong and cause home buyers to get stage fright,” Akins told the home builders. “The picture in most markets is not nearly as gloomy as they make it out to be.”
Earlier Tuesday, the National Association of Realtors said home sales of existing properties rose by 3 percent in January, the largest gain in two years, raising hopes that the worst of the slump might be over.
The national median home price, however, fell for a sixth straight month as home mortgage loan demand continued to lessen nationally. The median price dropped to $210,600, a decline of 3.1 percent from the figure of a year ago.
Akins said the slump in the Lexington market is hard to understand because job growth continued and Kentucky mortgage rates remained low in 2006 even as building permits declined by 30.1 percent in Fayette County - and by similar amounts in several nearby Bluegrass counties.
Permit totals generally move in the same direction as jobs.
“My concern for Lexington is that politically, the powers that be don’t realize how much we as an industry impact the housing market or, worse, maybe don’t care,” said Akins, who is also a real estate developer.
“The markets that are doing well have one thing in common,” he said. “The politicians support growth and realize that we don’t destroy communities, we create them.”
The five hottest areas of Lexington for home mortgage activity, based on 2006 residential permit values, are Hayes Boulevard off Richmond Road, Man o’ War Boulevard and Interstate 75, the Todds Road/Man o’ War area, and the Clays Mill-Boston Road area along Man o’ War.
SOURCE: Lexington Herald-Leader