Greater Cincinnati home builders and home sellers say there are a number of new signs that the region's housing market is on the rebound.
Builders say that first-time buyers are snapping up new houses priced between $150,000 and $200,000 largely because of the federal $8,000 tax credit.
"The new housing market has picked up from what it has been," said Bob Schroder of Arlinghaus Builders. "It's hit bottom and it's on it's way back up, we believe."
Realtors say the activity has dramatically reduced the inventory of unsold homes in Northern Kentucky by 30 percent since January – from a 10 to a seven month supply.
Johnny Hodge, president of the Northern Kentucky Association of Realtors, says his members have been re-energized.
"There is just a new level of enthusiasm and excitement out there," he said.
Schroder walked through a new three-bedroom ranch in Hebron Thursday that just sold for $169,000. He said others in that price range are selling quickly partly because of the tax credit.
"I see the market growing again," Schroder added. "There's a lot of demand for homes.”
However, many buyers are looking for smaller, more efficient homes in the 1,500 square foot range. To take advantage of that demand, Arlinghaus Builders has created a new division called Boone Homes, which features homes as low as $116,000.
Dan Dressman, executive director of the Home Builders Association of Northern Kentucky, said many other builders are remodeling their business plans to compete in the new niche market.
"The margins are smaller, obviously, because the units cost less, but they're selling more of those units," Dressman said. "That's how they're offsetting the cost."
Builders and realtors have said for some time that getting the first-time buyers into houses is the key to jump-starting the housing market.
Dressman said that chain reaction is starting to take place.
"You've got to have that first buyer on the first rung of the ladder to be able to allow that move-up buyer to buy the next level of house," Dressman added.
Hodge says the activity is great news for sellers who may likely get offers closer to their asking price. He added it's great news for buyers as well because of low interest rates.
"They're looking at 5.2 percent, quoted today, on a 30 year fixed FHA loan," Hodge said.
While the $8,000 tax credit is driving much of the activity, a variation on how it's used could propel sales even higher.
Ohio housing officials have already begun a program which allows first-time buyers to use part of that credit for a down payment.
Kentucky is close to approving a similar plan, according to both Dressman and Hodge.
