Monday, April 28, 2014

Appraising in Radcliff- Part 2

Have you ever come across a statistic that sends up a red flag?  Or in this case the appearance of a lack of a statistic?  I recently had appraised a rental property in Radcliff, and I found out that very few people knew exactly how many rental units there were in the Radcliff, KY area.  

In the five county area that BVS operates in, there are two main MLSs (multiple listing service): Louisville and Hardin County.  Louisville's MLS can get you pretty spoiled because they have an up to date rental database, unlike Hardin County.  In order to find rental data in Hardin County you would have to call a dozen property management companies and try to hobble something together.  Well, there is better way.

Searching for this data coincided with the recent announcement that Knox Hills (a government contractor that builds housing for the military), will be making 1302 units available for rent to a portion of the local population.  As an appraiser, this is a change in the local economic landscape that needs analysis.  
Let's start with defining a couple of markets.  Housing occupancy according to the U.S. Census Bureau is split into two areas: occupied and vacant housing units.  They further go on to split the occupied housing units into housing tenure (type of housing): owner occupied and renter occupied.  Your local area percentages may differ from our local numbers, but I was shocked to find out that our unadjusted tenure rental percentage in the 40160 area code was 46.1% in the 2010 census (compared to only 32.7% in the county seat Elizabethtown).  Now lets flood the renter occupied market with 1302 new units, and the renter occupied market now swings over to the majority of the occupied market at 53%!  What are the ramifications of having a quarter of the local rental market under the control of a military installation?  How does this effect the conversion of renters to buyers?  What are the effects in the community when property owners are in the minority?  There are many questions that come up once you start down this road.  

While I'm on the topic about decisions that the military has made that effects our community, lets revisit last month's article and continue to talk about trends.  A recent article in The News Enterprise quoted a local official saying that property values in the local area are stable; I beg to differ.  Comparing last year's 1st quarter to this year, Radcliff has seen its median sale price drop by over $16,000.  This is in conjunction with two consecutive quarters of declining property values and over 12 months of inventory according to the local MLS.  What has taken place in the past year to cause these numbers to drop?  How about an entire combat brigade team being deactivated early and government furloughs.  

Since the last article, we have seen the list-to-sale ratio slide to 12 months of declining percentages and an additional quarter of declining property values.  On a good note, the days on market and listing prices seem to be stable.  If either of these start to slide then I would have to say the the overall trend is now declining in the Radcliff area.  

I hate to leave on what seems like a down note, but sometimes the figures are hard to swallow.  As a property owner in Radcliff, I'm in the same boat as everyone else.  I hope you have enjoyed this article.  If so, please leave a review on our Facebook  or Google+ page.

1. All stats from HKAR MLS or


1 comment:

  1. This is a great article. Very nice analysis analysis and charts.