Editor’s note: This is the October 2012 report of The City Wire’s Arkansas Home Sales Report. The report, released monthly, accounts for between 70% and 75% of total Arkansas home sales.
Combined home sales in Arkansas’ largest markets were up more than 8% in October, ending four consecutive months of declines and showing huge gains in home prices.
The average home sales price was up more than 10% for the month.
There were 1,417 homes sold during October in the four large market areas measured by The City Wire’s Arkansas Home Sales Report, up 8.42% compared to October 2011, and up 10.53% compared to October 2010.
The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales.
The total value of October homes sold in the four markets was $236.823 million, up 19.43% compared to October 2011, and up almost 19% compared to October 2010. The average sales price of a home sold in the four markets during October was $167,130, well ahead of the $151,722 during October 2011.
Gains in home sales were not broad. Homes sold increased in the central Arkansas and Northwest Arkansas markets, but were down in the Fort Smith and Jonesboro regions.
October home sales were down 1.55% in the Fort Smith area (Crawford and Sebastian counties), and down 9.09% in the Jonesboro area (Craighead and Greene counties). Sales during October were up 12.18% in central Arkansas and up 11.37% in Northwest Arkansas.
Regionally, the number of homes sold during the first 10 months of 2012 are up in central Arkansas and Northwest Arkansas, and down in the Fort Smith and Jonesboro metro areas.
During the first 10 months of the year, home sales in the four markets totaled 15,355, up slightly over the 15,106 in the same period of 2011, and up 1.72% compared to the same period in 2010.
For the first 10 months of 2012, the value of homes sold in the four markets totaled $2.507 billion, up 11.55% compared to the same period of 2011, and up 8.58% compared to the same period of 2010.
The average days on market for a home in the four combined markets during the first 10 months of 2012 was 97.42, an improvement over the 98.48 during the same period of 2011.
REGIONAL FIGURES (Year-to-date)
Central Arkansas — Home sales
Jan.-Oct. 2012: 7,447
Jan.-Oct. 2011: 7,187
Jan.-Oct. 2010: 7,594
Fort Smith area — Home sales
Jan.-Oct. 2012: 1,357
Jan.-Oct. 2011: 1,420
Jan.-Oct. 2010: 1,456
Jonesboro area — Home sales
Jan.-Oct. 2012: 1,439
Jan.-Oct. 2011: 1,477
Jan.-Oct. 2010: 1,486
Northwest Arkansas — Home sales
Jan.-Oct. 2012: 5,112
Jan.-Oct. 2011: 5,022
Jan.-Oct. 2010: 4,559
Michael Pakko, University of Arkansas Institute for Economic Advance chief economist and state economic forecaster, was “pleasantly surprised” by the October report.
He said August and September were weak months for sales by comparison, but the numbers in October were encouraging. Pakko had initially forecast improved sales in markets throughout Arkansas for 2012, but had revised his forecast to reflect flat sales growth after the August and September numbers were finalized.
The October report, however, has caused him to reconsider the new forecast.
“Are we on the leading edge of a recovery? Perhaps,” Pakko said.
Pakko has paid attention to improving sales prices that have become more apparent as the year has passed. He said that is a “healthy development” for the market, adding he's seen evidence that more higher-end homes are selling in larger counties than they did last year.
Another good sign for Arkansas housing markets is that there is generally a drop off in sales from September to October. That drop did not occur this year, and suggests overall market conditions are improving.
Pakko said the month-to-month comparison is somewhat distorted. He said October 2011 was a very weak month when compared to sales throughout the year while October 2012 was a very strong month compared to the rest of this year. He also noted that 2011 was a bad year for sales, which makes any gains in 2012 appear favorable.
Still, Pakko is waiting on November and December figures before deciding whether 2012 marks the point where housing market conditions clearly began to improve.
Kevin King, broker with Weichert Realtors-King Realty Group in Fort Smith, said the Fort Smith region faces the impact of persistent high unemployment.
“We continue to experience an imbalance in the local supply and demand, with more homes for sale than qualified buyers. This is directly linked to job losses and weaker employment prospects, which is having a dampening effect on loan qualification for a certain segment of the buyer pool,” King said.
Home sales in the Fort Smith area during the first 10 months of 2012 are down 4.44% compared to 2011, and down 6.8% compared to 2010.
It’s a completely different picture in Northwest Arkansas. Agents across Benton and Washington counties sold 470 homes in October with a value of $84.44 million, compared to $69.973 million for 420 sales in the year-over-year period, according to MountData.com.
One of the largest firms in Northwest Arkansas, Crye-Leike Real Estate, reported $28 million in Northwest Arkansas sales for October, up 18% from the prior year. CEO Harold Crye said unit sales also rose 23% in this market.
Paul Bynum, market analyst with MountData.com, reports the housing inventory Benton and Washington counties had 3,454 residential listings at the end of October, down 15% from a year ago, and 52% lower than the all-time high 7,192 homes in August 2007.
Carolyn Cobb, a Realtor with Coldwell Banker RPM in Little Rock, said increasing sale prices are the natural result of supply and demand. She said housing inventories are dropping, so sales prices have gone up this year as a result. She said lower interest rates may have also had an impact on home prices.
Also, Cobb said, sellers have come to understand their homes have to be in pristine condition to bring top dollar.
Brenda Dacus, a Realtor with Fred Dacus Associates in Jonesboro, said she's seen the clear impact of low interest rates in her market.
“People see an opportunity to buy larger homes,” she said. “We're selling a few more high-end homes. … There's a lot of pent-up demand.”
One problem Dacus said she's observed is that some homeowners have been spooked by the down markets of the past few years and are reluctant to put their homes up for sale.
“We know people want to buy them … but some owners of higher-end homes don't bother putting them on the market,” Dacus said. “The demand is there.”
Home sales in the Jonesboro area during the first 10 months of 2012 are down 2.57% compared to 2011, and down 3.16% compared to 2010.