Editor’s note: You can access the full report and read more analysis at this link from The City Wire.
Home sales in Arkansas’ four largest markets during the first half of 2013 were up almost 10%, with only the Fort Smith metro area seeing a decline in the number and value of homes sold in the six-month stretch, according to The City Wire’s Arkansas Home Sales Report.
For the first six months of the year, Pulaski County had a narrow hold on the top Arkansas county for home sales. The county, with a population of around 390,000, had 2,144 home sales between January and June. Benton County, with a population of around 230,000, posted 2,125 home sales in the same six-month period.
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. This report counts the number of sales closed between January and June.
In the four markets, the number of homes sold totaled 9,671, up 9.57% compared to the first six months of 2012. The value of homes sold in the four markets between January and June totaled $1.614 billion, up 12.65% compared to the same period in 2012.
For the first six months of 2013, the number of homes sold in central Arkansas are up 8.9%, up 10.74% in the Jonesboro area and up 14.09% in Northwest Arkansas. Sales during the same period are down 2.49% in the Fort Smith area, and the values are down 7.12% compared to the first six months of 2011.
The average sales price of a home sold in the four markets during the first six months of 2013 was $166,908, up 4.65% compared to the 2012 period, and up 13.05% compared to the 2011 period.
Home sales activity was up for three of the four markets during June. There were 899 homes sold in central Arkansas, up 4.9% compared to June 2012, and up 6.26% compared to May 2011.
June home sales totaled 643 in Northwest Arkansas, up 3.7% compared to June 2012, but down 0.46% compared to June 2011.
Jonesboro area home sales totaled 166, up 5.06% compared to June 2012 and up 7.1% compared to June 2011.
In the Fort Smith area, home sales totaled 153, down 13.07% compared to June 2012, and down 18.18% compared to June 2011.
THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-June 2013: 4,599
Jan.-June 2012: 4,240
Jan.-June 2011: 4,005
Fort Smith area — Home sales
Jan.-June 2013: 783
Jan.-June 2012: 803
Jan.-June 2011: 843
Jonesboro area — Home sales
Jan.-June 2013: 897
Jan.-June 2012: 810
Jan.-June 2011: 859
Northwest Arkansas — Home sales
Jan.-June 2013: 3,392
Jan.-June 2012: 2,973
Jan.-June 2011: 2,878
The top five counties in terms of Jan.-June 2013 home sales:
Pulaski — 2,144, up compared to 2,031 in 2012
Benton — 2,125, up compared to 1,850 in 2012
Washington — 1,267, up compared to 1,123 in 2012
Faulkner — 718, up compared to 583 in 2012
Saline — 711, up compared to 637 in 2012
BEHIND THE NUMBERS
Kathy Deck, director of the Center for Business and Economic Research at the Sam Walton College of Business at the University of Arkansas, said better housing markets are largely the result of economic improvement around the nation. She said prices generally rise after a period of decline. She added that existing homeowners are in a better position these days – the market for new homes all but collapsed after 2007 and has been recovering since.
In general, Deck said labor markets have improved and that has led to increased demand for homes. Higher average sales prices, she said, are a natural consequence of increased demand.
Chuck Warford a Realtor with iRealty Arkansas, believes rising interest rates have contributed to increases in sales. According to the national Mortgage Bankers Association, the average interest rate on a 30-year, fixed mortgage was 4.58% on July 19 – a far cry from rates below 4% just a few months ago.
“The days of the 3 percent mortgage are probably gone,” Warford said.
Those rising rates have caused potential buyers to stop waiting for further drops and start buying before additional increases hit mortgage markets. Still, he said current rates are historically low. Warford saw interest rates as high as 15.5% in the early 1980s, so today’s buyers are still in great shape by comparison.
Jeff Collins, the economist for The City Wire, said interest rates are a tricky thing to predict and he’s not convinced they will rise much more in the near future. Collins said the unemployment rate has improved, but not enough to cause dramatic upward pressure on mortgage rates.
Arkansas’ unemployment rate in June was 7.3%. Collins said it needs to drop below 6% before demand for homes increases to a point where there will be upward pressure on interest rates.
The more than 250 mortgage bankers surveyed by Mortgage-X in its weekly Mortgage Rate Trend Survey tend to agree that interest rates will rise slowly – but not substantially – in the months to come. According to the July 22 survey, 48% of the bankers polled believe rates will rise slightly over the next 90 days.