Some of Southwestern Ohio's most affluent residents have quietly have been on a home-buying spree, partly prompted by the ravaged stock market.

The combination of stocks falling to five-year lows, historically low mortgage rates and homes appreciating better than many other investments is causing those consumers to splurge.

Sales of homes priced at $1 million or more in Southwest Ohio rose almost 41 percent to 45 in January through August, up from 32 the same period a year earlier, according to the Cincinnati Area Board of Realtors. There have been no sales of $1 million and up in Northern Kentucky or southeastern Indiana, Realtors there said.

“The weak stock market and low mortgage rates is being felt in that market just like it is in the overall market,” said Kathy Koops, president of the Cincinnati Area Board of Realtors and an office manager at Sibcy Cline Realtors, one of the Tristate's largest real estate firms. The local numbers mirror the national trend as sales of homes priced at more than $1 million jumped 48 percent in January through July, to 5,447 nationwide, according to DataQuick Information Systems, a research firm.

LOCATION, LOCATION, LOCATION

Where houses costing $1 million or more were sold in January through August this year in Southwest Ohio (there were no sales in Northern Kentucky or southeastern Indiana): Indian Hill: 29. Hyde Park: 3. Mason: 4. Amberley Village, Glendale, Lake Lorelei (Brown County), Loveland, Maineville (Hamilton Township), Montgomery, New Richmond (Clermont County), Ross, Walnut Hills: each 1. Source: Cincinnati Area Board of Realtors What does a million dollars buy in a house in Greater Cincinnati? Well, the old saw about location being the crucial thing in real estate rings true here, too. Most of the 123 properties listed at $1 million or more on the Greater Cincinnati and Northern Kentucky Multiple Listing Service Web sites are in Ohio and are on the east side. Fifty are in Indian Hill, where there are only 23 properties listed under $1 million. Here's a comparison of three houses: • If you spend $1.25 million in Lebanon, you could buy a 31-acre estate with an 1850s Italianate house on Oregonia Road with 13 rooms (one of them a gourmet kitchen added in 2000), plus a four-car garage, a stocked pond and tennis courts. • In Hyde Park, $1.35 million could get you a 13-room French Tudor on Elmhurst Place (off Torrance) that has an in-ground pool, a half basketball court, but only a two-car garage. And even though you'd have only 1.3 acres, you'd have a much bigger annual property tax bill than in Lebanon - $18,700 compared with $4,000. • In Sharonville, a seven-room house is listed for $1.6 million - but that's because the 2.5 acres it sits upon is on U.S. 42, making it a likely candidate for commercial development. Typically, the homes over $1 million in the exurbs (like Oxford) come with more than 100 acres of farmland and maybe even a barn or two. The most expensive home listed in Northern Kentucky is the Charles Weidemann mansion on Newport's Park Avenue. The three-story home, built in 1894, has 18 rooms and sits on 7 acres with a spectacular view of the Cincinnati skyline. The brick house, for example, has eight fireplaces, of which seven have hand-carved mantels, and it's listed for $2.5 million. The most-expensive house currently listed is offered at $4.9 million at 2349 Grandin Road in Hyde Park. The three-story stucco house has 16 rooms (six bedrooms and nine bathrooms). The house sits on 3.87 acres and has two guest apartments, a pool, a pool house and what the MLS describes as a “rose garden non pareil.” There is garage space for six cars - and the annual tax bill is just under $38,000.

Tumbling mortgage rates are the key force prompting those who can afford to buy million-dollar homes to do so, experts say. Lower rates allow them to buy ritzy homes for less as borrowing costs drop.

But tumbling stock prices have also been a friend to the housing market, one x of the few bright spots in the still soft economy. Home sales so far this year are on track to break last year's record, and that's helped keep the nation from sliding back into recession.

Many Americans see buying property as a safer place to invest, particularly when stocks are falling, industry experts say.

Greg McBride, a financial analyst at Bankrate.com, said many affluent individuals with sizable stock portfolios might be looking at buying luxurious homes.

“"Those people have more room to do that than, say, a person buying an average-priced home because they have a large base of capital they can afford to invest in other things,” he said.

Another factor fueling sales is that appreciation for homes keeps rising steadily, said Gerri Strauss, senior sales vice president at Coldwell Banker West Shell, one of Cincinnati's largest residential real estate firms.

She said housing prices have risen almost every year for the last four decades, increasing at a rate that is comparable to other long-term investments.

The average cost of a home in Southwest Ohio rose 3.48 percent to $162,379 in the first eight months of this year. The Dow Jones Industrial Average, meanwhile, is down 24.7 percent since the beginning of 2002.

“So with the current volatility of the stock market, people are investing into something that's more of a concrete asset that they can take advantage of at the same time,” she said.

Homes priced from $750,000 to $999,999 are also selling strongly. Sixty-six homes in that price range were sold through August, up from 47 a year ago. Ms. Strauss also said more million-dollar homes are available for sale, helping drive the trend, particularly in Indian Hill, where many such homes are listed and sold.

For example, there were 73 listings in Indian Hill on the MLS of Greater Cincinnati Web site on Tuesday, with 50 of those priced at $1 million or more. In comparison, there were 65 listings, with 37 worth $1 million or more, at the same time last year. Moreover, there were 40 active listings there during the same time in 2000, including 20 that were worth $1 million or more.

Ms. Strauss said several factors could be boosting the inventory, including more baby boomers approaching retirement and downsizing to smaller, lower-priced homes.

The recent rise in corporate downsizing also could have forced more people to sell their expensive homes, adding to the number for sale, Ms. Strauss says.

“We definitely have seen an increase in inventory the last two years,” she said.

But Ms. Strauss also said there is still a large pool of buyers who can afford million-dollar homes.

“There's a lot of people who have inherited, work very hard or took stock market gains over their life and can do that,"' she said. “There seem to be more people, particularly after last year's Sept. 11 terrorist attacks, reassessing what's important and wanting to live in a certain environment that they and their family can enjoy."

E-mail jmckinney@enquirer.com
       

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