The bloated inventory of homes listed for sale in Kentucky is showing some evidence of shrinking as more first time buyers purchase homes with historically low mortgage rates. But in most areas of the state home prices are still falling at nearly unprecedented rates as high joblessness unsettles the region.
In Louisville home sales are up and down, with some months experiencing higher sales and others seeing a drop. Weak consumer confidence and high unemployment hamper the market from a full recovery, despite near record low mortgage interest rates. But the area has seen a major reduction in foreclosures, which should help boost the market.
If fewer homeowners underwater on mortgages walk away from their homes in Louisville, it could provide a stabilizing influence for the region, which has seen housing prices drop for more than three years. The bloated inventory of homes, however, will have to be reduced further to influence home prices, which are projected to drop another 2.8% in 2012.
In Covington there are so many vacant homes in some neighborhoods that the city council has passed a resolution prohibiting the use of “naked” unpainted plywood on empty homes. The foreclosure crisis has a grip on the region, pressuring housing prices and should expect additional losses in home values in 2012.
The economy is hurting in Covington like most of the nation from the foreclosure crisis, which if forecast to reach new heights in the year ahead. Prices are forecast to drop another 4.2% through the year.
Home sales are soaring in Lexington as buyers take advantage of low mortgage rates
and housing prices that have been declining for years. The surge in sales has helped to reduce the inventory of homes listed on the market, particularly the over supply of foreclosures, which have made up the majority of sales.
Banks are slashing the prices on their foreclosed homes as they expect another avalanche of foreclosures to hit the market with more and more homeowners walking away from their mortgages. Lexington should expect an increase in sales during 2012, but only at the cost of lower home prices, forecast to decline 3.9% for the year.
In Bowling Green home values were sliding at the fastest rate in the state after the federal home buyer tax credit expired. But few foreclosures and bank assisted short sales have
influenced the marketplace, allowing things to begin stabilizing. Home sales should increase over the next year as deflation remains low, projected at only 1.3% for the year.