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Sellers ‘get realistic’ when pricing homes

The continued glut of distressed and foreclosed homes on the market in recent years has forced sellers to “get more realistic” with their approach to pricing, says Ken Warden, president of the Northern Kentucky Association of Realtors.

“There is no price level that is immune from the impact of foreclosures on our market,” Warden says. “People have begun to realize that this is our new normal right now.”

In the short term, the lower prices and low interest rates have fueled a buyers’ frenzy not seen since the region’s housing market began to go sour in 2006.

In the first two months of this year home sales have soared, climbing 15 percent in Southwest Ohio and more than 16 percent in Northern Kentucky.

“Confidence has returned to the market, which is something we haven’t seen in quite a few years,” Hasselbeck says.

But longer term, it’s anyone’s guess how long the drag on pricing may continue.

“We’re starting to see a little light at the end of the tunnel,” Hasselbeck says. “We hope by next year we start seeing at least 50 percent of our neighborhoods moving into the positive, but that might be a little over-optimistic.”

Increased sales reduce inventory oversupply

Compared to five years ago, when prices were still at peak levels, only 11 of the communities have posted price gains. Northside led the small pack. The $72,000 median price there last year was a 60 percent increase since 2007. Dayton, Ky., posted a 10 percent gain to $71,500, and Wyoming was up 9 percent to $271,000.

One bright spot, Realtors say, is that the decline in prices combined with the increase in sales is helping burn off excess inventory that has been lingering on the market for years.

Heading into home buying season, Southwest Ohio had about 11,500 homes on the market – nearly 2,000 fewer than were listed for sale this time last year, according to the Cincinnati Realtor board. Data for Northern Kentucky were not available.

A continued run of increased demand and shrinking inventory will mean less competition for sellers – and potentially the return of prices rising in their favor, says Rebecca Weber, an agent with Huff Realty.