Here in Northern Kentucky homes typically show better in spring than they do on dreary winter days. In recent years though our weather patterns have been a little harder to predict. This past winter was one of the mildest in history for our area. The weather has some effect on home sales, yet a much larger a influence on the housing market is the overall economic situation and its impact on buyers' mind set. Typically, home sales ramp up in Northern Kentucky starting in late March or early April and stays busy until the beginning of July when the market tends to slow down.
Negative economic news played a big part in the sluggish home sales during most of 2011. The stock market was unpredictable and the massive earthquake in Japan had repercussions for many industries. Those two things coupled with Greece on the brink of bankruptcy led to a lot of uncertainty which played out in our broad economy. Bad economic news coupled with uncertainty lowers consumer confidence. Buyers need to have jobs, but they also need to feel confident in their future to take on a major purchase like a house.
HOUSE SELLING TIP: The best time to sell a home is when consumer confidence is on the upswing; interest rates are low; unemployment is decreasing; the economic news is mild; and there are more buyers in your market than there are sellers. A high-demand, low-inventory market gives sellers an edge. Interest rates are currently at historic lows and are expected to stay low for the rest of 2012. Even with low rates, buyers have had difficulty qualifying due to rigid mortgage approval underwriting.
My opinion is housing will continually improve in 2012 partially due to lenders loosening credit. That opinion is based on the fact that banks are now lending 82 percent of loan-to-value (LTV), compared with a low of 74 percent LTV reached in mid-2010. This means qualified buyers need less cash to buy, which should lead to more sales this year yet higher home prices are not expected.
These positive indicators combined with a drop in homes for sale at the end of 2011 and a decrease in unemployment may provide an opportunity for sellers in 2012, provided their homes are priced right for the market. Any major surprises on the economic front could change the outlook but as for now it's looking better than it has since 2006.
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