By Jeff McKinney
The Cincinnati Enquirer

Exceptionally low mortgage rates sparked record home sales in the Tristate in 2002, breaking the mark set a year earlier.

Industry experts called the banner year a great one considering that it occurred as other parts of the U.S. economy were weak. The gain also came as the stock market fell to its lowest point in five years.

"Many people lost confidence in the sagging stock market and decided to invest their money in buying homes," Kathy Overstreet, president of the Cincinnati Area Board of Realtors, said Monday.

The number of single-family homes sold in Southwest Ohio, Northern Kentucky and southeastern Indiana rose 2.8 percent last year - to 27,904, compared with 27,146, the previous record.

The 2002 percentage gain locally came in lower than the national growth rate, more than 5 percent, which also set a record. There were 5.56 million homes bought in the United States in 2001, breaking the mark of 5.29 million sold in 2001, the National Association of Realtors said Monday.

In Greater Cincinnati, the housing market remained bullish as lower mortgage rates made homes more affordable, attracting many first-time buyers as well as those buying larger - and more expensive - second homes.

Among first-time buyers last year was Jesse Potts of Westwood.

Falling interest rates and finding a house he liked in that neighborhood prompted Mr. Potts to make a purchase of more than $100,000 in December.

Mr. Potts planned to wait another couple of years until he was stronger financially, but he was swayed by the lower rates.

"The lower rates brought the monthly payment down to a point that made it affordable,'' Mr. Potts, 41, said.

Southwest Ohio accounted for about 80 percent of the Tristate's sales. In 2002, there were 22,027 homes sold in Hamilton, Butler, Warren and Clermont counties versus 21,345 sold in 2001, the area's previous record.

The four-county area also had strong sales last month, normally a slow time for home sales. There were 1,564 sold in December, up 3 percent from 1,518 sold in December 2001.

Southwest Ohio also set a record for the dollar amount and average price. Total dollar volume came in at $3.5 billion, up from $3.3 billion two years ago. The average sale price for 2002 was $162,230, up about 3.9 percent from $156,162 in 2001, according to the Cincinnati Area Board of Realtors.

Sales in Northern Kentucky, down for much of last year, surprisingly came in a bit higher.

Home sales mainly in Boone, Kenton and Campbell counties totaled 5,119 last year, up one home from 5,118 in 2002, according to the Northern Kentucky Association of Realtors.

Jack Hoffman, president of the group's board, said higher sales in December than the previous December helped Northern Kentucky sales basically break even.

"We saw a little bit more activity last December and hopefully we'll see that recovery continue into January and February," he said.

Sales for the year also climbed in southeastern Indiana: 758 last year vs. 683 in 2001.

Rosalie Walton, president of the southeastern Indiana Board of Realtors, said lower interest rates and slightly higher home appreciation helped boost sales.

The average weekly rate on a 30-year, fixed rate $100,000 mortgage at the end of last year was 6.04 percent, carrying a monthly payment of $601.80.

E-mail jmckinney@enquirer.com