Your home may have lost value
Throughout the turbulence of stock market gyrations and erratic energy costs in the first half of the decade, Greater Cincinnati and Northern Kentucky people who owned homes could count on one constant: Their homes grew in value every year.
Between 2000 and 2005, equity in real estate turned out to be a surefire investment. In Greater Cincinnati, the average resale price of a single-family home rose 20 percent during that span to $191,225 from $159,125. In Northern Kentucky, the average price rose to $154,438, from $134,132, up 15 percent.
Then came 2006.
What had been automatic became idiosyncratic. Average resale prices fell in 137 neighborhoods and towns in the region – and rose in 123 others. An Enquirer analysis of data from local Realtor groups found the price differences in comparable communities often were head-scratchingly gaping: The average in Deerfield Township, for example, rose 8 percent while falling 14 percent in Symmes Township. The average fell 11 percent in Alexandria yet rose 5 percent in Independence.
The mishmash of winners and losers produced a 5.9 percent drop in average resale prices in Hamilton, Butler, Clermont and Warren counties and a 1 percent gain in Northern Kentucky in 2006. For homeowners on the Ohio side, it was the first decline in home sale prices in more than 15 years.
Guy Wesselkamper, co-owner of Signature Appraisal Services in Montgomery, said the divergent price trends reflect circumstances peculiar to each neighborhood.
Indian Hill and Mason, he said, were flush with homes for sale last year.
Prices in Montgomery soared 23 percent because of the teardown of small homes in favor of larger replacements. Prices in some suburbs were hurt by the failure of school tax levies.
“You have to take these things on a case-by-case basis,” Wesselkamper said. “You had Homearama in Deerfield Township last year, and those were million-dollar homes. You take eight, 10 or a dozen homes for a million-plus, that’s going to bring the average up.” Deerfield’s average resale price rose 8 percent to $344,701 last year.
Each community had its own story last year:
• Average resale prices in Price Hill, a city neighborhood littered with the carnage of flippers and foreclosures, fell 17 percent to $47,005. The 17 percent drop tied with Covington for biggest average resale price decline among communities with more than 100 homes sold.
• The demand for homes in Northern Kentucky’s inner-beltway suburbs lifted the average price by 30 percent in Fort Mitchell, 18 percent in Fort Thomas and 17 percent in Villa Hills.
• Sales of new, expensive condos pushed up the average 89 percent in Bellevue, 35 percent in Dayton, Ky., and 36 percent in Cincinnati’s East End.
• Although home sales in the community with the highest turnover in region – West Chester Township – fell 11 percent in 2006, the average resale price rose 4.7 percent to $249,480.
• Clear Creek Township, excluding Springboro, pulled off a 39 percent increase in home sales last year while posting an 11 percent increase in average resale price.
Steve Tucker, a sales agent with Huff Realty in Fort Mitchell, said 2006 was a good year for the Northern Kentucky real estate market despite a decrease in the numbers of homes sold. Part of the sales drop, he said, stems from the drop in new construction.
“Not surprisingly, Campbell County sales were strong and showed significant increases in 2006,” Tucker said. “Urban cities and older neighborhoods seemed to have had more of a down year than rural areas, but several new projects that are under way may reverse that trend.”
Industry experts blame last year’s downturn in used home sales on higher interest rates, tapped-out demand and the dropoff in speculative home-buying for quick resales, or flipping. Norm Miller, director of the University of Cincinnati’s real estate program, hardly blinks at the slowdown in this region because he knows it was much worse – and remains much worse – in cities in Florida, Arizona and California.
“The stable neighborhoods that have longer-term residents are going to see no price effects, just a little less volume,” Miller said. “The more transient neighborhoods with more turnover, where there are a lot of foreclosures and where banks no longer make subprime loans, could soften up a bit on price.”
On balance, however, Miller said home prices in Greater Cincinnati and Northern Kentucky are still low.
“Our income-to-value ratio is very low compared to many parts of the country,” he said. “That means they’re very affordable. You get a lot of house in Cincinnati. It takes a lot less income to buy a house in Cincinnati.”
BY JAMES MCNAIR
