Home sales trends improve in August

But Building permits remain on downward slide

ssloan@herald-leader.comSeptember 14, 2011 

The percentage of Central Kentucky home sales continued to bounce back in August as the market further shed the shadow of the federal homebuyer tax credit.

Sales of detached residential homes jumped more than 32 percent compared to August 2010. In July, the measure had risen 11.1 percent, marking the first time since the primary end of the tax credit in June 2010 that sales were up compared to the same month a year earlier.

"We're glad to be on the positive side of those numbers instead of on the negative side for a change, and hopefully that will continue," said Barb Curtis, president of the Lexington-Bluegrass Association of Realtors. LBAR compiles the data from sales reported by its members, though the statistics can sometimes change due to later reporting of closings.

August also showed another marked improvement declines narrowed for sales of newly built homes. Realtors in the 14 Central Kentucky counties that LBAR represents sold 53 new homes, down just 3.6 percent from last year. In July, that measure had declined by 43.2 percent year over year, to 38 homes.

"We're always excited to see the new home construction starts because it just means so many jobs for so many people," Curtis said.

The strong month of home sales also reduced a measure called months of inventory, which is the average amount of time a home is on the market.

That statistic fell to 9.3 months compared to 13.1 months a year earlier. In a healthy housing market, that measure should be about five or six months. Any time span shorter than that is a seller's market, and anything longer is a buyer's market.

But another economic indicator — building permits — seems to suggest the housing market is still searching for a bottom, as the number of permits issued for single-family homes continued to approach levels not seen since 1981.

Lexington officials issued 57 permits to build single-family homes in August. That's up dramatically from 23 in July but still down from 85 in August 2010, said Dewey Crowe, director of Lexington's Division of Building Inspection.

"Certainly August is a strong showing compared to July," Crowe said. "We'll just have to see how that translates going forward."

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