Wednesday, January 21, 2015

Appraising in Radcliff & Market Conditions

 January is always a good time to see what our local markets have been doing for the past year.  For those of you in the Radcliff market, you may or may not be aware of where we are in the Real Estate market.  Over the past year, two events come to mind that will have long term effects on the local economy.  Of the two, Ft. Knox is the most apparent.

Just over 18 months ago, we started hearing about government furloughs and the early deactivation of the Duke Brigade Combat Team.  Since then, additional cuts are in the works to bringing the gains we saw during the BRAC to pre-2007 levels.  Heightened security and gate closures have also affected our local small business along the Wilson Rd corridor.  We have also seen Ft. Knox open its older housing community (Knox Hills) to the local rental community for qualified families.  This essentially flooded Radcliff’s rental market with 1302 new rental units which now makes Radcliff a renter dominated market according to the US Census Bureau (See my previous article from April 2014). 

The second event we saw was the victory of Mike Weaver as Radcliff’s new Mayor.  In light of what had been going on with Ft. Knox, both candidates campaigned on bringing more business into our city, which I agree with.  If a community is dependent on a single employer, when that employer has a reduction in force or goes out of business, the community suffers also; however, if the community has a diverse commercial and industrial base, the reductions of one employer has less of an effect on the community as a whole.  What would happen to Georgetown, KY if Toyota decided to pack up and go to Brazil?

Shortly after Mayor Weaver’s appointment, he named JJ Duvall as the new head of the economic development for Radcliff.  JJ is Radcliff’s former Mayor, just as Mayor Weaver was the former head of the economic development for Radcliff.  With the roles being reversed, time will tell if Radcliff can finally get some new commercial/industrial business in the area which we need very badly. 

So, what have these two events and Radcliff’s economy to do with each other?  Since the start of the government furloughs, we have seen a steady decline in the median sale price in Radcliff.  This is combined with an increase in Real Estate Owned Property (REO), and an increase in inventory which stifles demand.    Speaking with a local investor, it is also becoming difficult in securing financing for investment property in Radcliff.  The rest of the county doesn’t seem to be effected as much by these changes.  When you look at the amount of Real Estate sold in the coverage area for HKARs MLS, 2014 is a little higher than 2013, except Radcliff.   On the plus side, it’s a great time to buy!  

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