Wednesday, March 26, 2003

Real estate fades in February

War and weak economy catching up with Tristate

By Jeff McKinney
The Cincinnati Enquirer

Tristate home sales fell slightly in February, as war jitters and a weak economy offset the lowest mortgage rates in almost four decades and put a dent in a resilient housing market.

The 2 percent drop in the number of single-family homes sold in Southwest Ohio, Northern Kentucky and southeastern Indiana was the first monthly drop since November. The number sold in those areas came in at 1,828 last month, down from 1,866 in February 2002, according to local boards of Realtors.

Sales in Southwest Ohio, which accounts for 80 percent of the local housing market, dropped 7 percent in February from a year ago, the biggest monthly decline since June. Those sales totaled 1,366, down from 1,470 last February.

Sandra Butler, president-elect of the Cincinnati Area Board of Realtors, said worries of war and the weak economy took their toll.

"The weak economy is finally catching up to the real estate market. Though we had some bad weather in January, the dip was mainly tied to the economy." The bad weather in January brought fewer buyers out to start looking, which might have hurt February sales, she said.

Overall Tristate sales would have fared worse if not for a 26 percent gain in Northern Kentucky. Sales in mainly Boone, Kenton and Campbell counties hit 385 in February, up from 305 last February, the second straight monthly gain.

"I think we are all a little surprised how much sales are up in Northern Kentucky," said Steve Tucker, president of the Northern Kentucky Multiple Listing Service Inc. "I believe it shows that people are choosing real estate over other types of investments."

Nationally, February home sales came in at a seasonally adjusted annual rate of 5.84 million homes, down 4.3 percent from the record annual rate of 6.1 million in January but up 1.2 percent from the 5.77 million pace in February last year, the National Association of Realtors said.

The drop in overall Tristate sales came as mortgage rates hit record lows.

The average rate on a 30-year, fixed-rate mortgage was 5.88 percent as of Monday. Though that rate was up slightly from last week's 5.84 percent, it was down from 7.17 percent a year ago and close to the lowest since the Cincinnati Area Board of Realtors began tracking local rates in 1985.

The drop also knocked Southwest Ohio off its pace to surpass the record year of 2002. Sales in Hamilton, Butler, Warren and Clermont counties this year total 2,677, down 3.2 percent from 2,765 in January and February last year.

But Butler is optimistic, calling the February dip a temporary setback. She said that although March sales could show a decline, particularly with the war under way, April sales could rebound.

"It's temporary because we still have very low interest rates and a large pool of buyers, including first-time move-up buyers as well as baby boomers and the elderly still willing to buy homes,'' she said.


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